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The quantity of a good or service that producers are willing to produce at a given price. Change in price affect the quantity supplied and these changes are represented in the movement along the supply curve.

The reason for the direct relationship between price and quantity supplied is the seller's goal of profit-maximization. For the seller to make a profit, the sell price must be sufficient to cover the seller's cost of production. An increase in the selling price will make it easier for sellers to cover their cost of production. An increase in the selling price will cause existing producers to increase their production and will attract new producers into the market. Thus, an increase in the selling price will cause a increase in the quantity supplied.
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14y ago
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15y ago

The law of supply and demand dictates that the greater the demand for any given product the greater the price. Demand,l largely dictates the price of products, but the rarity of any product in demand also contributes to the price. Then there is the theory of supply side economics that states demand can be created for abundant supplies.

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12y ago

If there's a lot of it available, and the demand is low, then the price will be low. If there's not a lot available, and the demand is high, then the price will be high.

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13y ago

More xcommonly known as "The Law of Supply and Demand."

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13y ago

there is an obvious relation between the two, if you buy three cows it will obviously cost more than one cow.

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10y ago

direct

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Q: What is the direct relationship between price and quantity supplied?
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Yes, it does.


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