Which statement best explains the law of supply?
Answers
The statement ‘Quantities increase or decrease, following increase or decrease of price’, best explains the Law of Supply.
The Law of Supply is a key economic theory, which states that there is a direct relationship between price and quantity. Those who produce goods or services, are ready to supply more quantity at higher prices, by increasing their production, thereby increasing their profits.
The law of supply best explains the quantities increase or decrease followed by increase or decrease of price.
The law of supply is the chief economic theory that there is a direct relationship between the price and quantity.
Those producing goods and services are ready to supply more quantity at increased prices by increasing the production which in turn increases the profit.