What is law of supply explain?

What is law of supply explain?

Definition: Law of supply states that other factors remaining constant, price and quantity supplied of a good are directly related to each other. When the price of a good rises, the supplier increases the supply in order to earn a profit because of higher prices.

What is the law of supply and why is it important?

The law of supply says that at higher prices, sellers will supply more of an economic good. These two laws interact to determine the actual market prices and volume of goods that are traded on a market.

What is a law of supply and demand definition?

: a statement in economics: the competitive price that clears the market for a commodity is determined through the interaction of offers and demands.

What is the principle of the law of supply Brainly?

=>The law of supply is a fundamental principle of economic theory which states that, keeping other factors constant, an increase in price results in an increase in quantity supplied. In other words, there is a direct relationship between price and quantity: quantities respond in the same direction as price changes.

What are the factors affecting the law of supply?

Supply will be determined by factors such as price, the number of suppliers, the state of technology, government subsidies, weather conditions and the availability of workers to produce the good.

What are some examples of 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.

What are the determinants of Law supply?

Price is perhaps the most obvious determinant of supply. As the price of a firm’s output increases, it becomes more attractive to produce that output and firms will want to supply more. Economists refer to the phenomenon that quantity supplied increases as price increases as the law of supply.

What is the law of supply and what does it mean for price?

Definition: The law of supply is a basic microeconomic concept that states that price and quantity supplied are directly related. Thus, when the price of a product increases, the quantity supplied increases. Equally, when the price of a product decreases, the quantity supplied decreases.

What are statements refers to the law of supply?

The statement given for the law of supply is as follows: “Other things remaining unchanged, the supply of a commodity expands with a rise in its price and contracts with a fall in its price.” The law of supply can be better understood with the help of supply schedule, supply curve, and supply function.