Answer to Question #277227 in Economics of Enterprise for kawishadi

Question

Define Supply and Law of Supply giving examples of how determinants of Supply can change the quantity supplied.

Answer 1

The price of the product/service is the most evident predictor of supply. If all other factors are equal, a product's supply increases if its relative price is higher. The reason is straightforward. A company sells things or services to make money, and as prices grow, so does profit.