What might an increase in the price of a good or service encourage producers to do?
A). decrease their quantity supplied
B). increase the demand for the good or service
C). increase their quantity supplied
D). decrease the demand for the good or service
An increase in the price of a good or service generally encourages producers to do which of the following?
To answer this question, we need to understand the relationship between price and supply. According to the law of supply, as the price of a good or service increases, producers tend to increase the quantity supplied to the market. This is because higher prices often result in higher profits, making it more attractive for producers to supply more of the good or service.
Therefore, the correct answer is:
C). Increase their quantity supplied