According to the law of supply, price and quantity supplied have a(n) ______ relationship.

• A. positive
• B. inverse
• C. constant
• D. negative

Answer: (A)

Verified step by step guidance

1. Recall the law of supply, which states the relationship between the price of a good and the quantity that producers are willing to supply.
2. Understand that according to this law, when the price of a good increases, producers are generally willing to supply more of it because higher prices can cover higher production costs and increase potential profits.
3. Conversely, when the price decreases, producers supply less because the incentive to produce diminishes.
4. This means that price and quantity supplied move in the same direction, which is described as a positive relationship.
5. Therefore, the correct term to fill in the blank is 'positive' because price and quantity supplied have a positive relationship according to the law of supply.