Question

Why supply is directly proportional to price?

Answer 1

Answer:

Supply is directly proportional to price because, with an increase in the prices of raw materials, the firm earns lower profits than before. So, the firm is willing to supply less of that commodity at the prevailing price.

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Answer 2

ANSWER

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Explanation

Supply is directly proportional to price because, with an increase in the prices of raw materials, the firm earns lower profits than before. So, the firm is willing to supply less of that commodity at the prevailing price.