Which of the following is an implication of the law of supply?
Part 2
A.
Increases in money prices will lead to an increase in supply while increases in relative prices will lead to a decrease in supply.
B.
Producers will offer more units at a higher price and fewer units at a lower price.
C.
Changes in the price of a good leads to a shift in the supply curve.
D.
Individuals will purchase fewer units at a higher price and more units at a lower price.
B. Producers will offer more units at a higher price and fewer units at a lower price.
B. Producers will offer more units at a higher price and fewer units at a lower price.
The correct answer is B. Producers will offer more units at a higher price and fewer units at a lower price.
To determine the correct answer, it is important to understand the law of supply. The law of supply states that there is a direct relationship between the price of a product and the quantity that producers are willing and able to supply. In other words, when the price of a product increases, producers are generally willing to supply more of that product, and when the price decreases, producers are willing to supply less.
Option A is incorrect because an increase in money prices does not necessarily lead to an increase in supply. The law of supply focuses on the relationship between price and quantity supplied, not money prices.
Option C is also incorrect because changes in the price of a good do not lead to a shift in the supply curve. Instead, changes in factors such as production costs, technology, and government regulations can cause the supply curve to shift.
Option D is incorrect because it describes the law of demand, not the law of supply. The law of demand states that there is an inverse relationship between the price of a product and the quantity that individuals are willing and able to purchase. When the price of a product increases, individuals tend to purchase fewer units, and when the price decreases, individuals tend to purchase more units.
To summarize, the implication of the law of supply is that producers will offer more units at a higher price and fewer units at a lower price, which corresponds to option B.