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    1. The law of supply is illustrated by a supply curve that is: a. horizontal. b. downward sloping. c. vertical. d. upward sloping. 2. An "increase in the quantity supplied" suggests a: a. right

    Answer to: 1. The law of supply is illustrated by a supply curve that is: a. horizontal. b. downward sloping. c. vertical. d. upward sloping. 2. An...

    Supply and demand

    1. The law of supply is illustrated by a supply curve that is: a. horizontal. b. downward...

    1. The law of supply is illustrated by a supply curve that is: a. horizontal. b. downward... Question:

    1. The law of supply is illustrated by a supply curve that is:

    a. horizontal.

    b. downward sloping.

    c. vertical. d. upward sloping.

    2. An "increase in the quantity supplied" suggests a:

    a. rightward shift of the supply curve.

    b. movement up along the supply curve.

    c. movement down along the supply curve.

    d. leftward shift of the supply curve.

    3. Seller A was willing to sell 400 units of a commodity at a price of $5 per unit. He is now willing to sell the same number of units at a price of $4 per unit. Evidently, seller A has experienced a(n):

    a. increase in supply.

    b. decrease in supply.

    c. increase in demand.

    d. decrease in demand.

    4. We observe a market where the price has risen and the quantity being sold has declined. This could be caused by a(n):

    a. increase in demand.

    b. increase in supply.

    c. decrease in demand.

    d. decrease in supply.

    Demand and Supply:

    Demand is defined as the amount of a good or service that the consumers are willing to purchase at different price levels. Thus, the demand curve is a function of price. A change in the price level causes a movement along the demand curve while a change in other factors affecting the demand causes a shift in the demand curve. Supply, on the other hand, is the amount of good or service that the suppliers are willing and able to supply to the market at different price levels. Thus, a change in the price causes a movement along the supply curve while a change in other factors that affect the supply will cause a shift in the supply curve.

    Answer and Explanation:

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    Question 1:

    The correct answer is: d. upward sloping.

    The law of supply states that...

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    Microeconomic Shifts in Supply and Demand Curves

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    Chapter 2 / Lesson 6

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    In microeconomics, shifts in supply and demand curves occur due to changes in demand and supply for goods or services caused by different factors like changes in consumers' disposable income. Determine the microeconomic shift factors of supply and demand curves, and understand their impact on equilibrium and prices paid by consumers.

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    Law of supply (article)

    If the price of something goes up, companies are willing (and able) to produce more of it.

    Supply

    Law of supply

    If the price of something goes up, companies are willing (and able) to produce more of it.

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    Key points

    The law of supply states that a higher price leads to a higher quantity supplied and that a lower price leads to a lower quantity supplied.Supply curves and supply schedules are tools used to summarize the relationship between supply and price.

    Supply of goods and services

    When economists talk about supply, they mean the amount of some good or service a producer is willing to supply at each price. Price is what the producer receives for selling one unit of a good or service. An increase in price almost always leads to an increase in the quantity supplied of that good or service, while a decrease in price will decrease the quantity supplied.

    When the price of gasoline rises, for example, it encourages profit-seeking firms to take several actions: expand exploration for oil reserves, drill for more oil, invest in more pipelines and oil tankers to bring the oil to plants where it can be refined into gasoline, build new oil refineries, purchase additional pipelines and trucks to ship the gasoline to gas stations, and open more gas stations or keep existing gas stations open longer hours.

    Economists call this positive relationship between price and quantity supplied—that a higher price leads to a higher quantity supplied and a lower price leads to a lower quantity supplied—the law of supply. The law of supply assumes that all other variables that affect supply are held constant.

    Supply schedule and supply curve

    A supply schedule is a table that shows the quantity supplied at each price.

    A supply curve is a graph that shows the quantity supplied at each price. Sometimes the supply curve is called a supply schedule because it is a graphical representation of the supply schedule.

    Here's an example of a supply schedule from the market for gasoline:

    Price (per gallon) Quantity supplied (millions of gallons)

    \$1.00 $1.00

    dollar sign, 1, point, 00

    500 500 500 \$1.20 $1.20

    dollar sign, 1, point, 20

    550 550 550 \$1.40 $1.40

    dollar sign, 1, point, 40

    600 600 600 \$1.60 $1.60

    dollar sign, 1, point, 60

    640 640 640 \$1.80 $1.80

    dollar sign, 1, point, 80

    680 680 680 \$2.00 $2.00

    dollar sign, 2, point, 00

    700 700 700 \$2.20 $2.20

    dollar sign, 2, point, 20

    720 720 720

    Price is measured in dollars per gallon of gasoline, and quantity supplied is measured in millions of gallons.

    Here's the same information shown as a supply curve with quantity on the horizontal axis and the price per gallon on the vertical axis. Note that this is an exception to the normal rule in mathematics that the independent variable goes on the horizontal axis and the dependent variable goes on the vertical.

    A supply curve for gasoline

    The graph shows an upward-sloping supply curve that represents the law of supply.

    The supply curve is created by graphing the points from the supply schedule and then connecting them. The upward slope of the supply curve illustrates the law of supply—that a higher price leads to a higher quantity supplied, and vice versa.

    The shape of supply curves will vary somewhat according to the product: steeper, flatter, straighter, or more curved. Nearly all supply curves, however, share a basic similarity: they slope up from left to right and illustrate the law of supply. As the price increases, say, from $1.00 per gallon to $2.20 per gallon, the quantity supplied increases from 500 million gallons to 720 million gallons. Conversely, as the price decreases, the quantity supplied decreases.

    The difference between supply and quantity supplied

    In economic terminology, supply is not the same as quantity supplied. When economists refer to supply, they mean the relationship between a range of prices and the quantities supplied at those prices—a relationship that can be illustrated with a supply curve or a supply schedule. When economists refer to quantity supplied, they mean only a certain point on the supply curve, or one quantity on the supply schedule. In short, supply refers to the curve, and quantity supplied refers to a specific point on the curve.

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    Log in vanemi96 6 years ago

    Posted 6 years ago. Direct link to vanemi96's post “so just to be clear with ...”

    so just to be clear with the difference between law of demand and law of supply.

    law of demand deals with consumers and what they buy

    Source : www.khanacademy.org

    Law of Supply Definition

    The economic law of supply states that as the price of a good or service increases, the quantity of goods or services increases and vice versa.

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    Law of Supply

    By THE INVESTOPEDIA TEAM Updated February 22, 2022

    Reviewed by ERIKA RASURE

    Fact checked by SKYLAR CLARINE

    What Is the Law of Supply?

    The law of supply is the microeconomic law that states that, all other factors being equal, as the price of a good or service increases, the quantity of goods or services that suppliers offer will increase, and vice versa. The law of supply says that as the price of an item goes up, suppliers will attempt to maximize their profits by increasing the number of items for sale.

    KEY TAKEAWAYS

    The law of supply says that a higher price will induce producers to supply a higher quantity to the market.

    Because businesses seek to increase revenue, when they expect to receive a higher price for something, they will produce more of it.

    Supply in a market can be depicted as an upward-sloping supply curve that shows how the quantity supplied will respond to various prices over a period of time.

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    Law of Supply

    Understanding the Law of Supply

    The chart below depicts the law of supply using a supply curve, which is upward sloping. A, B, and C are points on the supply curve. Each point on the curve reflects a direct correlation between quantity supplied (Q) and price (P). So, at point A, the quantity supplied will be Q1 and the price will be P1, and so on.

    Investopedia / Julie Bang

    The supply curve is upward sloping because, over time, suppliers can choose how much of their goods to produce and later bring to market. At any given point in time, however, the supply that sellers bring to market is fixed, and sellers simply face a decision to either sell or withhold their stock from a sale; consumer demand sets the price, and sellers can only charge what the market will bear.

    If consumer demand rises over time, the price will rise, and suppliers can choose to devote new resources to production (or new suppliers can enter the market), which increases the quantity supplied. Demand ultimately sets the price in a competitive market; supplier response to the price they can expect to receive sets the quantity supplied.

    The law of supply is one of the most fundamental concepts in economics. It works with the law of demand to explain how market economies allocate resources and determine the prices of goods and services.

    British economist Alfred Marshall (1842-1924), a specialist in microeconomics, contributed significantly to supply theory, especially in his pioneering use of the supply curve. He emphasized that the price and output of a good are determined by both supply and demand: The two curves are like scissor blades that intersect at equilibrium.1

    Examples of the Law of Supply

    The law of supply summarizes the effect price changes have on producer behavior. For example, a business will make more video game systems if the price of those systems increases. The opposite is true if the price of video game systems decreases. The company might supply 1 million systems if the price is $200 each, but if the price increases to $300, they might supply 1.5 million systems.

    To further illustrate this concept, consider how gas prices work. When the price of gasoline rises, it encourages profit-seeking firms to take several actions: expand exploration for oil reserves; drill for more oil; invest in more pipelines and oil tankers to bring the oil to plants where it can be refined into gasoline; build new oil refineries; purchase additional pipelines and trucks to ship the gasoline to gas stations; and open more gas stations or keep existing gas stations open longer hours.

    Source : www.investopedia.com

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