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Supply curve slopes upward because there is a direct relationship between the supply of commodity and it's price.When the price of a commodity is high the supply increases and vice-versa. The main reasons for this kind of behaviour of the producer's/sellers are as follows: # Profit and Loss: With the rise in prices,producers generally increase their production in view of higher profit possibilities and vice-versa. # Change in stock: With the increase in the price of a commodity,sellers are ready to sell more from their old stock of goods.On the other hand,when price of the commodity decreases,sellers would like to increase their stock to avoid the losses. # Entry or exit of firms: When the price of a commodity increases,new firms enter into the industry with a view to earn profits which in turn increase the supply.On the other hand,when price starts falling,marginal firms(or relatively less efficient firms) leave the market to avoid expected losses which thereby decreases supply.
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The law of supply implies that the supply curve is?
Upward-sloping
When the supply curve is upward sloping?
Supply curve will be upward sloping in two reason,the first reason is know as the income effect and the second is know as substitution effect.
What does the law of demand suggest that most demand curves will be?
The law of supply predicts the supply curve will be upward sloping.
What characteristics lead to an upward-sloping supply curve?
Increasing opportunity costs.Increasing marginal costs.
Why does the short run aggregate supply curve slope upward?
there are three reasons why the SRAS curve is upward sloping Sticky wages theory Sticky Price Theory misperception theory
The law of supply implies that the supply curve is?
Upward-sloping
When the supply curve is upward sloping?
Supply curve will be upward sloping in two reason,the first reason is know as the income effect and the second is know as substitution effect.
What does the law of demand suggest that most demand curves will be?
The law of supply predicts the supply curve will be upward sloping.
What characteristics lead to an upward-sloping supply curve?
Increasing opportunity costs.Increasing marginal costs.
Why does the short run aggregate supply curve slope upward?
there are three reasons why the SRAS curve is upward sloping Sticky wages theory Sticky Price Theory misperception theory
Is The aggregate demand curve downward sloping for the same reason that the demand curve for a single good is downward sloping?
true because it is still supply and demand downward sloping
How does a supply curve reflect the law of supply?
Companies will want to supply more goods/services at a higher price because they can make more profit this way. Therefore, the supply curve is upward sloping since at each increase in price, there will be a corresponding increase in quantity supplied. This exactly is the law of supply: businesses will supply more at higher prices.
What are typical shapes of marginal-benefit curves?
Marginal Benefit curve is usually downward sloping, while Marginal Cost is usually upward sloping.
What happen to price when supply is constant and demand increaes?
prices will fall if demand decreases and the supply is constant. the supply curve will be vertical and demand curve will be downward sloping.
Why does the LM curve slope upwards?
In equilibrium: Money supply = Money demand.Summarizing it, we can explain the upward sloping LM curve as following:If income is high then thedemand for money will be high relative to the fixed supply. In order to equilibrate money demand and money supply, interest rates have to also be high to reduce money demand
In which direction does the supply curve slope from the left to the right?
upward
In which direction does the supply curve slope from left to the right?
upward
