Question

The law of supply demonstrates the behaviors of producers when they

A)change their company’s name.B)decide to hire fewer workers.C)supply goods to consumers. D)launch a new marketing campaign.

Answer 1

c) supply goods to customers

Answer 2

The correct answer is C.

A supply function provides the quantity of a certain product that suppliers are willing to manufacture at different market price levels. The law of supply states that for higher prices, producers are willing to supply larger quantities as the profit they will earn will be higher. Therefore the function shows the direct relationship between quantities and prices defined by the law of demand.