The supply curve is upward-sloping because:

• A. production costs decrease as output increases
• B. producers are willing to supply more of a good as its price increases
• C. government regulations require higher prices for higher quantities
• D. consumers demand less of a good as its price increases

Answer: (B)

Verified step by step guidance

1. Understand the concept of a supply curve: it shows the relationship between the price of a good and the quantity producers are willing to supply.
2. Recall that an upward-sloping supply curve means that as the price increases, the quantity supplied also increases.
3. Recognize that this positive relationship exists because higher prices provide an incentive for producers to increase production and supply more of the good.
4. Eliminate incorrect options by analyzing their logic: production costs typically increase, not decrease, with output; government regulations do not directly cause the supply curve to slope upward; and consumer demand relates to the demand curve, not supply.
5. Conclude that the correct explanation is that producers are willing to supply more of a good as its price increases, which is why the supply curve slopes upward.