Law of Supply

Definition

States that, ceteris paribus, the quantity supplied of a good increases as its price rises and decreases as its price falls — establishing a direct/positive relationship between price and quantity supplied. Exceptions include supply of labour at high wages.

Example

"When the price of wheat rises to ₹30/kg from ₹20/kg, farmers are incentivized to supply more wheat to the market, demonstrating the Law of Supply."

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