A supply curve results from the assumption that there are quantities and prices between those on the timetable. According to the law of supply, there is a direct correlation between price and the amount delivered. In other words, when the price rises, the amount supplied rises as well.
Why does the quantity rise when the price rises?
- The quantity offered increases as the price rises. Generally speaking, less supply results from lower prices. Prices that are higher encourage producers to produce more of the good or commodity, given that their costs aren't rising as quickly.
- A cost squeeze brought on by lower pricing restricts supply.
- While other factors remain constant, if a good's price increases, fewer people will buy it. The quantity requested of a good rises when the price of that good decreases. assuming all other factors influencing purchase decisions stay constant, the link between the amount desired and the price of a good.
- Knowledge of the Demand Curve : The law of demand states that when the price of a given good rises, the quantity required falls, all other things being equal. This is expressed by the demand curve moving downward from the left to the right.
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