Question

State whether the following statement is TRUE and FALSE.

Supply is indirectly related to price.

Options

• True

• False

Answer 1

Supply is indirectly related to price. – False

Explanation:
This statement is false, as supply of a good is directly related to price. This is because, higher prices means higher profit prospective for the seller. Accordingly, they prefer to increase sales as the price rise and vice-versa. Thus, supply is directly related to price of the commodity.