Q:

What does the law of supply state?

A:

In economics, the law of supply states that, considering all aspects equal, the price of a marketed good or service is directly proportional to the quantity supplied. As the price increases, the quantity supplied also increases. Conversely, a decrease in the price results in a decrease in the quantity.

The law of supply, along with the law of demand, comprise the two fundamental laws in economics. Supply refers to the total amount of produced commodities or services, while demand pertains to the quantity of certain products or services desired by consumers.The law of supply sets constraints on the buyers, while the law of demand restricts the producers.

Learn More

Related Questions

  • Q:

    What is a price searcher in economics?

    A:

    In economics, a price searcher is a person who sells products, goods or services and influences the price of the item by the amount of units sold of each of these commodities. Price searchers generally set their own prices for the commodities they sell because there is a single price market present for these commodities.

    Full Answer >
    Filed Under:
  • Q:

    What is supply and demand?

    A:

    The laws of supply and demand are foundation concepts in the field of economics. The law of demand indicates that under typical circumstances, the greater the price of a good, the lower the demand. The law of supply indicates that the higher the market price, the greater the supply.

    Full Answer >
    Filed Under:
  • Q:

    What is the "law of supply"?

    A:

    The law of supply is an economic concept stating that the price and supply of a good or service are directly elastic to each other. When the price of a good or service increases, the supply of that particular good or service invariably increases, and vice versa. The law of supply states that as price rises, suppliers seek to maximize profits by increasing the quantity supplied.

    Full Answer >
    Filed Under:
  • Q:

    What are examples of supply and demand?

    A:

    Supply and demand are market forces that determine the price of a product. An example is when customers are willing to buy 20 pounds of strawberries for $2 but can buy 30 pounds if the price falls to $1, or when a company offers 5,000 units of cell phones for sale at a price, and only half of them are bought.

    Full Answer >
    Filed Under:

Explore