Managerial Economicsbasic
What does the law of supply predict, other things equal, when a good's own price rises?
Answer
Quantity supplied generally rises
Explanation
### Why this is right
The law of supply describes the usual relationship between a good’s own price and quantity supplied. With other conditions unchanged, sellers generally offer more when the price rises.
### The concept
A price change causes movement along the supply curve. A change in production cost or technology can shift the entire curve because it changes the amounts sellers are willing to offer at different prices.
### The other options
- **Supply necessarily shifts left**: own-price changes move along the existing curve; a left shift requires another determinant to change.
- **Quantity demanded necessarily rises**: this conflicts with the usual law of demand when own price rises.
- **The market must remain in disequilibrium**: price changes can move a market toward equilibrium; they do not necessarily preserve imbalance.
### Remember
Own price changes quantity supplied along the curve; other supply determinants shift it.
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