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Question
Law of supply states that ______.
Options
There is direct relation between price and supply.
There is inverse relation between price and supply.
There is direct and proportionate relation between price and supply.
None of these
Solution
Law of supply states that there is direct relation between price and supply.
Explanation:
The Law of Supply states that, all else being equal, as the price of a good or service increases, the quantity supplied of that good or service also increases. Conversely, as the price decreases, the quantity supplied decreases. This establishes a direct relationship between price and supply.
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