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Economics miscellaneous

  1. Under increasing returns the supply curve is
    1. positively sloped from left to right
    2. negatively sloped from left to right
    3. parallel to the quantity-axis
    4. parallel to the price -axis
Correct Option: A

Supply curve, in economics, is a graphic represen-tation of the relationship between product price and quantity of product that a seller is willing and able to supply. Product price is measured on the vertical axis of the graph and quantity of product supplied on the horizontal axis. In most cases, as when there is increasing returns, the supply curve is drawn as a slope rising upward from left to right, since product price and quantity supplied are directly related (i.e., as the price of a commodity increases in the market, the amount supplied increases).



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