The upward slope of the supply curve reflects the:

• A. decreasing marginal cost of production
• B. increasing opportunity cost of producing additional units
• C. inverse relationship between price and quantity supplied
• D. law of diminishing marginal utility

Answer: (B)

Verified step by step guidance

1. Step 1: Understand what the supply curve represents. The supply curve shows the relationship between the price of a good and the quantity that producers are willing to supply at each price level.
2. Step 2: Recall that the supply curve typically slopes upward, meaning that as price increases, the quantity supplied increases. This reflects producers' behavior in response to price changes.
3. Step 3: Recognize that the upward slope is due to the increasing opportunity cost of producing additional units. As more units are produced, resources that are less efficient or more costly to use must be employed, raising the marginal cost.
4. Step 4: Connect this to the concept of marginal cost, which is the cost of producing one more unit. The marginal cost tends to increase as production expands, causing producers to require higher prices to supply more units.
5. Step 5: Eliminate other options by understanding that the supply curve does not reflect decreasing marginal cost (which would slope downward), nor does it represent the law of diminishing marginal utility (which relates to consumer behavior), and the relationship between price and quantity supplied is direct, not inverse.