Define law of supply
3 answers
The law of supply states that there is a direct relationship between the price of a good or service and the quantity supplied by producers. According to this law, when the price of a good or service increases, the quantity supplied by producers also increases, and conversely, when the price decreases, the quantity supplied decreases. This relationship is based on the assumption that other factors, such as production costs, remain constant. In essence, the law of supply describes how producers respond to changes in price levels to meet the demand in the market.
If it is too expensive you do not buy it.
It is correct that as consumers, if a good or service is considered too expensive, we may choose not to buy it. This is due to the basic principle of demand and the concept of consumer behavior. When prices are high, consumers may opt to forgo purchasing a particular good or service in order to allocate their limited resources to other more affordable options. The law of supply, on the other hand, focuses on the behavior of producers in response to changes in price. When prices rise, suppliers are incentivized to increase the quantity supplied to capitalize on the higher profits. Conversely, if prices fall, producers may reduce the quantity supplied to avoid potential losses. The law of supply and demand interact to determine the market equilibrium and prices at which goods and services are bought and sold.
3 answers