Which of the following is true?

Question

Quizplus · Accepted Answer

The law of supply states that there is a direct relationship between the price of a good and the quantity supplied, meaning as the price increases, the quantity supplied also increases, assuming other factors are constant. This is because higher prices can cover the higher production costs and are more profitable for producers, encouraging them to supply more. Choices B, C, and D contain inaccuracies: B incorrectly describes the supply curve as showing a negative relationship between price and quantity supplied; C is incorrect because the market supply curve is the horizontal summation, not vertical, of individual supply curves; and D is incorrect because an increase in supply is represented by a rightward shift in the supply curve, not upward.

Which of the Following Is True