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Questions
State the law of supply.
State the law of supply and explain it with the help of a diagram.
Solution 1
The law of supply states that other factors being equal, the quantity of a good supplied increases with an increase in the price level and decreases with a decrease in the price level of a good.
Solution 2
The law of supply states that other factors being equal, the quantity of a good supplied increases with an increase in the price level and decreases with a decrease in the price level of a good.
The supply schedule below shows the positive relationship between price and quantity supplied.
| Price (in Rs) | Quantity Supplied |
| 5 | 100 |
| 10 | 200 |
| 15 | 300 |
SS is the supply curve sloping upwards. When the price increases from Rs. 5 to Rs. 15, the quantity supplied also increases from 100 units to 300 units.
Solution 3
Law of supply states the direct relationship between price and quantity supplied, keeping other factors constant.
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