State the law of supply and explain it. What will be an ideal ...

[codyclark]

State the law of supply and explain it.
 
  What will be an ideal response?

Question 2

Refer to the above figure. If the government imposes a price ceiling of 60
 
  A) the quantity traded will be 150, and the price will be 40.
  B) the quantity traded will be 100, and the price will be 60.
  C) the quantity traded will be 200, and the price will be 60.
  D) the quantity traded will be 150, and the price will be 60.

[nguyenhoanhat]

Answer to Question 1

The law of supply indicates the direct or positive relationship between price and quantity supplied. This law states that when the price of a good increases, sellers will make more of that good available for a specified period of time, other things being equal. Other things being equal, a higher price gives producers more incentive to produce and sell more of that product. Conversely, when the price of a good decreases, sellers will make less of that good available for a specified time period.

Answer to Question 2

A