An Increase in Price Will Lead to an Increase in Quantity

question 43

Multiple Choice

An increase in price will lead to an increase in quantity supplied. This statement is

• A) the law of supply.
• B) the law of demand.
• C) untrue always.
• D) a normative statement.

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Definitions:

Capacity Shortage

A situation where the demand for a company's output exceeds its production capacity.

Margin Reduction

The decrease in the difference between the selling price of a product and its cost, often due to increased costs or reduced selling prices.

Backup Source

An alternative or supplementary source, often used for data, power, or supply chain redundancy, to ensure continuity in the event of primary source failure.

Production Capacity

The maximum amount of goods or services that can be produced by a facility within a specific time frame under normal working conditions.