Question

Explain any two reasons for the supply curve to be positively sloped.

Answer 1

The supply curve is positively sloped because of the following reasons:

1. Profit: The merchant sells more at a high price and fewer at a low price because he wants to maximize profit. Because there are more profit opportunities, producers boost their output. The price and supply of a commodity are directly correlated, which explains why the supply curve has a positive slope.
2. Entry of new producers: The supply curve’s rising slope can also be attributed to this. Because more businesses enter the market as new ones join, supply rises; on the other hand, supply falls when older businesses go out of business. The supply curve has a positive slope as a result.