Multiple Choice
In microeconomics, the law of supply states that, holding other factors constant, what happens to the quantity supplied of a good when its price increases?
3. The Market Forces of Supply and Demand
The Supply Curve
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Join thousands of students who trust us to help them ace their exams!Watch the first videoMultiple Choice
In a market economy, what does the term "supply" refer to?
A
The quantity of a good or service that producers are willing and able to sell at various prices over a given period of time
B
The maximum price consumers are willing to pay for a given quantity of a good or service
C
A situation in which the quantity demanded equals the quantity supplied at a particular price
D
The quantity of a good or service that consumers are willing and able to buy at various prices over a given period of time
Verified step by step guidance1
Understand that in microeconomics, 'supply' refers to the behavior of producers in the market.
Recognize that supply is about the quantity of a good or service that producers are both willing and able to sell.
Note that supply is not just a single quantity but varies depending on different price levels, so it is expressed over a range of prices.
Remember that supply is measured over a specific period of time, reflecting how much producers can provide during that timeframe.
Distinguish supply from related concepts: it is not about consumer willingness (demand), maximum prices consumers pay, or market equilibrium where quantity demanded equals quantity supplied.
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