Question

In: Economics

Write down the definition of "supply curve". Is the supply curve positively sloped or negatively sloped?...

  1. Write down the definition of "supply curve".
  2. Is the supply curve positively sloped or negatively sloped?
  3. Explain why by pointing out the foundamental economic assumption that determines the slope of the supply curve.

Solutions

Expert Solution

ANSWER :-

a). Supply curve is the graphical introduction of connection between's cost of a decent or administration and amount provided in a given timeframe. Cost is spoken to on y-hub (vertical xis); and amount provided on x-hub (level pivot).

b). Supply curve has a poitive slope as it demonstrates an immediate connection among cost and amount provided. That is, higher the cost, higher is the amount provided.

c). Positive slope of the supply curve demonstrates that makers need more significant expense so as to supply  greater amount with the goal that they can take care of the higher peripheral expense of poduction.

As yield expands, the open door cost of creation increments. Because of more significant expenses, makers utilize assets utilized somewhere else in the productin of this great.

In this way, the open door cost is higher as the assets are better for the creation of the other great from where they were occupied.

Likewise, at more elevated level of yield, negligible expense of creation increaes at an expanding rate because of the theory of unavoidable losses.

In this manner, makers need more significant expense so as to flexibly higher amount, along these lines making the Supply curve  emphatically slope.

PLEASE UPVOTE.


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