--%>
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 : Demand supply Newspaper item: “Due to

    Newspaper item: “Due to lower grain prices, consumers can expect retail prices of choice beef to begin dropping slightly this spring with pork becoming cheaper after midsummer,” the Agriculture Department predicted. “This reflects increasing supply,” the department said. Does the statement use th

    		•
  • Q : Illustrate a fundamental characteristic

    Illustrate a fundamental characteristic of demand behavior?

    		•
  • Q : Introduction of the term combined

    Give a brief introduction of the term combined leverage? And in what manner it is calculated?

    		•
  • Q : When productive resources are utilized

    While productive resources are utilized efficiently: (w) prices greatly exceed production costs for current outputs. (x) opportunity costs are at their minimums for all goods. (y) domestic production exceeds the value of foreign output. (z) the value

    		•
  • Q : Illustrate the Risks involved with bonds

    Illustrate the Risks involved with bonds?

    		•
  • Q : Difference between normal and inferior

    Difference between normal goods and inferior goods. Give illustration.

    		•
  • Q : Illustrate Measuring unemployment

    Illustrate Measuring unemployment?

    		•
  • Q : Heterodox cost theory Is Eiteman &

    Is Eiteman & Guthrie’s empirical evidence on the shape of the average total cost curve consistent along with heterodox cost theory?  Discuss it out.

    		•
  • 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

    		•
  • Q : Specialization and trade according to

    Not between concepts explained in Adam Smith’s Wealth of Nations was the conception which net benefits occur from: (1) specialization and trade according to comparative advantage. (2) the division of labor in production processes. (3) reliance o

    		•