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Questions and Answers
The law of supply states that as price increases, ceteris paribus, _____
The law of supply states that as price increases, ceteris paribus, _____
quantity supplied increases
What is the difference between supply and quantity supplied?
What is the difference between supply and quantity supplied?
Supply is the total amount of goods available; quantity supplied is how much is made available at each price level.
A vertical supply curve is said to be _____
A vertical supply curve is said to be _____
perfectly inelastic
Which of the following producers is most likely to face a relatively elastic supply curve in the short run?
Which of the following producers is most likely to face a relatively elastic supply curve in the short run?
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What is the relationship between the price of a product and the quantity supplied?
What is the relationship between the price of a product and the quantity supplied?
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Study Notes
Law of Supply
- The law of supply asserts that, all else being equal, an increase in price leads to an increase in quantity supplied.
Supply vs. Quantity Supplied
- Supply refers to the total quantity of goods available in the market, while quantity supplied is the specific amount produced at various price points.
Supply Curve Characteristics
- A vertical supply curve indicates perfectly inelastic supply, meaning quantity supplied does not change regardless of price fluctuations.
Producers and Elasticity
- Artists are likely to experience a more elastic supply curve in the short run, indicating that their supply can change significantly with price changes compared to other producers.
Price-Quantity Supplied Relationship
- The relationship is direct; as product prices rise, quantity supplied increases, whereas a decrease in price leads to a reduction in quantity supplied, reflecting a consistent trend in market behavior.
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Description
Test your understanding of the law of supply with this quick check. The quiz covers definitions, distinctions between supply and quantity supplied, and the characteristics of supply curves. Perfect for reinforcing your knowledge in economics.
