Which of the following is true about the supply curve?

• A. It represents the relationship between price and quantity demanded.
• B. It typically slopes upward, indicating that higher prices lead to a greater quantity supplied.
• C. It typically slopes downward, indicating that higher prices lead to a lower quantity supplied.
• D. It is always perfectly vertical, showing that quantity supplied does not change with price.

Answer: (B)

Verified step by step guidance

1. Step 1: Understand what a supply curve represents. The supply curve shows the relationship between the price of a good and the quantity of that good that producers are willing and able to sell.
2. Step 2: Recall the law of supply, which states that, all else equal, an increase in the price of a good leads to an increase in the quantity supplied. This is because higher prices provide an incentive for producers to supply more.
3. Step 3: Recognize that this positive relationship between price and quantity supplied means the supply curve typically slopes upward from left to right.
4. Step 4: Contrast this with the demand curve, which shows the relationship between price and quantity demanded and typically slopes downward, reflecting that higher prices reduce quantity demanded.
5. Step 5: Note that the supply curve is not always perfectly vertical; a vertical supply curve would indicate quantity supplied does not change with price, which is rare and only applies in very specific cases (e.g., perfectly inelastic supply).