Which of the following is true of the supply curve of a good?

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

Answer: (B)

Verified step by step guidance

1. Understand the definition of the supply curve: it shows the relationship between the price of a good and the quantity that producers are willing to supply.
2. Recall the law of supply, which states that, all else equal, an increase in the price of a good typically leads to an increase in the quantity supplied.
3. Recognize that this positive relationship means the supply curve usually slopes upward from left to right, reflecting that higher prices incentivize producers to supply more.
4. Eliminate options that describe the supply curve as perfectly vertical or perfectly horizontal, since these imply no change in quantity supplied with price changes, which contradicts the law of supply.
5. Conclude that the correct characterization of the supply curve is that it typically slopes upward, indicating that higher prices lead to greater quantity supplied.