The supply curve slopes upward because:

• A. producers are willing to supply more of a good as its price increases
• B. consumers demand less of a good as its price increases
• C. higher prices decrease the cost of production
• D. government intervention always increases supply

Answer: (A)

Verified step by step guidance

1. Understand the concept of the supply curve: it shows the relationship between the price of a good and the quantity producers are willing to supply.
2. Recall the law of supply, which states that, all else equal, an increase in price leads to an increase in quantity supplied.
3. Recognize that producers are motivated by profit, so higher prices provide an incentive to supply more because selling at a higher price increases potential revenue.
4. Eliminate incorrect options by analyzing their logic: for example, higher prices do not decrease production costs, and government intervention does not always increase supply.
5. Conclude that the upward slope of the supply curve is due to producers' willingness to supply more as the price increases, reflecting the positive relationship between price and quantity supplied.