Which of the following satisfy the law of supply? Select the two correct answers.(1 point)

Question

Responses

An increase in price is followed by an increase in supply.
An increase in price is followed by an increase in supply.

A decrease in price is followed by a decrease in supply.
A decrease in price is followed by a decrease in supply.

An increase in price is followed by an increase in quantity supplied.
An increase in price is followed by an increase in quantity supplied.

A increase in price is followed by a decrease in quantity supplied.
A increase in price is followed by a decrease in quantity supplied.

A decrease in price is followed by a decrease in quantity supplied.
A decrease in price is followed by a decrease in quantity supplied.

Answer 1

The law of supply states that, all else being equal, an increase in price results in an increase in the quantity of a good or service supplied, and a decrease in price results in a decrease in the quantity supplied.

Based on this definition, the two correct responses that satisfy the law of supply are:

1. An increase in price is followed by an increase in quantity supplied.
2. A decrease in price is followed by a decrease in quantity supplied.

(Note: While the first statement, "An increase in price is followed by an increase in supply," is often used interchangeably in casual conversation, it is more technically accurate to say "increase in quantity supplied" for the law of supply.)