Question

Choose one of the following questions and post a response:

1. Why does the demand curve for a good slope downward to the right? What does the downward slope reflect? Use a specific product or service as an example in your post.
2. What is the law of supply? What does it imply about the supply curve for a good or service?  Use a specific product or service as an example in your post.
3. If the quantity of a good consumers are purchasing exceeds the quantity producers are willing to supply at the current price, what will happen to the market price in the future? Why?   Use a specific product or service as an example in your post.
4. What does the height of the demand curve for a good indicate? What does the height of the supply curve for the good indicate? What condition must be present if an exchange is going to occur?   Use a specific product or service as an example in your post.
5. In a market economy, will units of a good be produced and purchased if consumers value them more than their cost of production? Explain. If the production cost per unit of a good exceeds the value derived by consumers, will the good continue to be produced and consumed? Why or why not?

Your initial post should be at least 250 words. Be sure to include references and citations for any information you included. Opinions are welcomed, but make sure they are "educated" opinions with resources to back them up. Post directly into the text area (do not attach files unless they are supplementary material).

Answer 1

LAW OF SUPPLY:

Law of supply states that other things remaining constant (ceteris paribus), there is a positive relationship between own price of a commodity and it's Quantity supplied. Thus, more is supplied at a higher price and less at lower price.

It indicates that there is a positive relationship between own price and quantity supplied of commodity.

This is because other things remaining constant, higher price implies higher profit. Accordingly the seller is induced to produce more and sell more.

Assumptions to the law of supply:

There is no change in- price of factors of production

Technique of production

Goal of the firm

Price of related goods

Business expectations

And government policies.

Exceptions to the law of supply:

It does nit apply to agricultural products whose supply is governed by natural factors.

Articles of social distinction

Perishable commodities.

Example:

Price	Quantity
$10	20
$12	30
$14	40

In this example you can see that as the price of good Increases the quantity supplied also increase. As selling more means earning more at a greater price.

NOTE: I HOPE YOU WILL BE SATISFIED WITH MY ANSWER PLEASE DO PROVIDE RATING. THANK YOU AND HAVE A NICE DAY. :))