There are many laws that apply to various things in different ways. For instance, there is the law of supply which appears to confuse many people especially those who do not know much about supply. As such questions like which of the following is consistent with the law of supply might seem so difficult and hard to answer by some people.
If you have this problem then worry no more, this text is all you need. The text is all you need in case you are one of the people who keep asking which of the following is consistent with the law of supply. This text will be looking at all these factors to enable or help you with a better understanding of all these factors in the event you need to know.
What Is The Law Of Supply?
You want to answer the question of which of the following is consistent with the law of supply no problem. However, for you to understand this question or even its answer much better. The law of supply is microeconomic which states that with all factors constant, increasing prices results in a rise in the prices of goods and services supplied and vice versa.
According to this law, a rise in the prices in the market will automatically spark a rise in the prices and goods supplied. The reasoning behind all this is that suppliers will always try to profit more from a rise in the prices in the market. The idea here is to make as many profits from the market as possible.
The case applies to when the prices go down as well. When the market is saturated with a decrease in prices then no one is going to bother to supply their products. The reason as to why this is the case is because of the fact that no one would like to make a loss in business.
As such, people only supply more to the market when they know the prices in the market are favoring them. In the event that these prices are not favoring them then they will not supply anything or will supply so little until such a time when the prices will go up.
Which Of The Following Is Consistent With The Law Of Supply?
Having looked at that background information, it is now time to now answer the question of which of the following is consistent with the law of supply. As this text looks into this issue, it is important to note that there are many details to this matter. Therefore, the text will be looking at a variety of factors that come in as the best answers to this question.
There Is A Positive Relationship Between The Price And The Supplied Quantity?
This one has been talked about already in this text but there is no harm in looking at it again. As a person looking for answers to the question which of the following is consistent with the law of supply. This is one of the answers you can provide for this question.
You need to understand there is always a relationship between price as well as the supplied quantity in the market. Being this way means that a rise in the price will automatically lead to a rise in the products and the services supplied. The aim, in this case, is to make sure that the suppliers get as much money as it is possible.
A Decrease In The Prices Leads To A Decrease In Supply
The rules of supply are so simple, this is also another dimension to it as well. In supply, price affects a lot of things including the number of goods and services supplied. For instance, if there is a reduction in the prices in the market then the supply of corresponding services will also reduce.
Many suppliers hold the view that by supplying services and goods in such circumstances then they risk making losses in the end. As such, they choose not to supply their goods and services in such times unlike having to supply goods in such times where profits might be somehow hard to make.
However, this rule or concept is not absolute as there are exceptions to it in some cases. For instance, a supplier might still choose to supply their products and services even in times when the prices are so low. One example of such a case is when a company or business is trying to empty their stock and feel that if they stay for too long then they risk making abnormal losses.
As such, many of them prefer not to hold their products and choose to sell them right away with the view of avoiding getting stuck with goods that they might not be able to sell afterward. This is the only exceptional case under which this rule is sometimes bent.
A Movement Along The Supply Function Occurs When There Is A Change In The Market Place
This is also another of the rules or factors which you will find in the law of supply. In fact, you can list this as one of your answers when someone asks you which of the following is consistent with the law of supply. Whenever there is a movement along with the supply function then that will attract a change in the marketplace.
The changes in the market, in this case, could be an increase in supply or even sometimes a decrease of the same. Whenever there is such a thing then chances are there is going to be a significant effect on the rate of supply in the market.
Conclusion
Which of the following is consistent with the law of supply is one of the questions which many people keep asking? The text above compiles some of the best answers you can ever find anywhere to this question which you can give in case you need to answer this question.
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