--%>

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 : Problem on Infrastructure The state

    The state legislature has voted to develop a grant-in-aid policy to try and induce local communities to devote more resources to improving their infrastructure. Town O = Has an operating budget of $2 million; currently spends a tot

  • Q : Sources of not tax revenue Provide some

    Provide some sources of not tax revenue? Answer: Escheat, income from public enterprises, special assessment, fees and fines and so on.

  • Q : Barter - Efficiency and the Gains from

    Relative to other systems, economies in that people exchange goods or resources directly along with other people for other goods or resources without using money like a usual denominator rely relatively heavily upon: (i) barter. (ii) specialization. (

  • Q : Illustrate receipts from several

    Illustrate how receipts come from several sources in Federal Finance?

  • 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 : Utilitarianism of Jeremy Bentham with

    The utilitarianism of Jeremy Bentham would clash most strongly along with the philosophic principles of: (w) the epicureans who followed the teachings of Epicurus [c. 341 to 271 BC]. (x) hedonism. (y) the Greek philosophers and mediev

  • Q : Elucidate facilitating factors that

    Elucidate facilitating factors that explain the growth of trade?

  • Q : Increase in the American dollar price

    “An increase in the American dollar price of the South Korean won implies that the South Korean won has depreciated in value.”  Explain.

  • Q : Meaning of invisible hand according to

    Adam Smith’s opinion of an “invisible hand” powerfully implies the meaning that: (w) pursuit of individual self interest must be controlled. (x) most people lose sight of what’s good for society. (y) most peopl

  • Q : Checkout problem A grocery store chain

    A grocery store chain is considering ways to improve the performance of the waiting lines at their checkout stands. A heavily trafficked checkout stand is monitored for 120 min. In that period, 60 customers have their groceries rung up, and depart from the store. The