--%>
Assignment Help - homework help

Why does the supply curve slope upward

Explain the law of supply. Why does the supply curve slope upward?

E

Expert

Verified

As prices rise because of increased demand for a commodity, producers find it more and more profitable to increase the quantity they offer for sale whereas supply curve will slope upward from left to right.  Clearly, firms would rather sell at a higher price than at a lower price.  Furthermore, it is essential for firms to demand a higher price as they increase production.  This comes about because as they produce more, they initiate to run up against capacity constraints and costs rise. As manufacturing increases firm will need to add an extra shift and then a third shift, mutually conceivably at higher wages.  It may run out of warehouse space and have to rent at higher cost from another firm.

   Related Questions in Business Economics

  • Q : Allocating resources and distribute

    The market system tends to mainly beneficial allocating resources and distributes goods while: (1) the distributions of wealth and resource ownership are extensively perceived as equitable. (2) markets are extremely competitive. (3) goods are rival an

    		•
  • Q : Describe double coincidence of wants

    Double coincidence of wants: This means that one person's wishing to buy and sell should coincide with another person’s wish to buy and sell.

    		•
  • Q : Government Pegged Currencies Question:

    Question: If a government pegs the value of its currency to another currency, the government must stand ready to i. _________________________ the "hard" currency to defend the pegged value of its own currency. ii.

    		•
  • Q : Problem on productive contribution

    Suppositions underpinning simple production possibilities frontier models don’t comprise a need that: (i) Net resources are fixed. (ii) All resources are efficiently employed. (iii) Technology is steady. (iv) Resource owners are paid according t

    		•
  • Q : Write short note on Demand Write short

    Write short note on Demand, Supply and Equilibrium?

    		•
  • Q : Explaination on Economical Management

    ECONOMICS Explain why each of the following statements is True, False, or Uncertain according to economic principles. Use diagrams where appropriate. Unsupported answers will receive no marks. It is the ex

    		•
  • Q : Local expenditures and receipts for all

    Elucidate the Local expenditures and receipts for all local governmental units in 1996?

    		•
  • Q : Guideline for monetary policy using

    Question: In using the Taylor Rule as a guideline for monetary policy, what are the pros and cons of using forecasted values of inflation and output rather than observed values of these variables? Answer: <

    		•
  • Q : Write short note on Demand Write short

    Write short note on Demand?

    		•
  • Q : Decreases in opportunity costs of

    The opportunity costs of production and consumption for most resources and goods tend to be decreased by: (w) private monopoly power. (x) price floors. (y) intense competition. (z) price ceilings. Hey friends pleas

    		•