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Question
Law of supply states that ______.
Options
There is direct relation between price and supply.
There is inverse relation between price and supply.
There is direct and proportionate relation between price and supply.
None of these
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Solution
Law of supply states that there is direct relation between price and supply.
Explanation:
The Law of Supply states that, all else being equal, as the price of a good or service increases, the quantity supplied of that good or service also increases. Conversely, as the price decreases, the quantity supplied decreases. This establishes a direct relationship between price and supply.
RELATED QUESTIONS
State the law of supply.
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There is a direct relationship between price and quantity supplied.
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