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Why is Supply Directly Proportional to Price? - ICSE Class 10 - Economics

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Question

Why is supply directly proportional to price?

Solution

Supply is directly proportional to price because, with an increase in the prices of raw materials, the firm earns lower profits than before. So, the firm is willing to supply less of that commodity at the prevailing price.

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APPEARS IN

 2016-2017 (March) (with solutions)
Question 2.1 | 2.00 marks
Solution Why is Supply Directly Proportional to Price? Concept: Concept for Demand and Supply.
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