the fundamental reason why most supply curves are upward sloping is that course hero

What causes a backward-sloping supply curve?

The fundamental reason why most supply curves are upward sloping is that a. consumers substitute lower-priced goods for higher-priced goods. b. the quantity supplied increases as more firms enter the market. c. a higher price never reduces quantity supplied by enough to lower total revenue and so higher production is motivated.

Which best describes a supply curve?

Mar 26, 2017 · The fundamental reason why most supply curves are upward sloping is that A. technological improvement reduces the costs of production and firms are willing and able to provide a given quantity at a lower price. B. an increase in price gives producers incentive to increase the quantity supplied.

Why does supply curve have a positive slope?

Feb 09, 2020 · The fundamental reason why most supply curves are upward sloping is that X a. consumers substitute lower-priced goods for higher-priced goods. Xb. the quantity supplied increases as more firms enter the market. a higher price never reduces quantity supplied by enough to lower total revenue and so higher 62 production is motivated.

How does a supply curve compare to a demand curve?

The basic reason why a supply curve slopes upward is because producers want to make as much profit as they can.

What are the reasons behind the upward slope of the supply curve?

A supply curve slopes upward primarily because of the profit motive. When the market price of a particular good rises following an increase in demand, it becomes more profitable for firms to respond by increasing their output. This increase is illustrated by an upward supply curve.Jan 19, 2021

Why is the demand curve downward sloping and the supply curve upward sloping?

The slope of the demand curve (downward to the right) indicates that a greater quantity will be demanded when the price is lower. On the other hand, the slope of the supply curve (upward to the right) tells us that as the price goes up, producers are willing to produce more goods.

What are the reasons for downward sloping demand curve?

Whenever the price of a commodity decreases, new buyers enter the market and start purchasing it. This is because they were unable to purchase it when the prices were high but now they can afford it. Thus, as the price falls, the demand rises and the demand curve becomes downward sloping.

Why is the supply curve upward sloping quizlet?

The supply schedule is a table of the relationship between the price suppliers are willing to sell of a specific quantity of a good or service. The supply curve is upward sloping because it reflects the higher price needed to cover the higher marginal cost of production.

Why does the supply curve slope upward?

The basic reason why a supply curve slopes upward is because producers want to make as much profit as they can. The fact that the supply curve slopes upward means that there is a direct relationship between the price at which the producer can sell their product and the quantity of the product that they can and will sell.

Why is the price of a product higher?

The higher the price of a product—or, more accurately, the more a customer is willing to pay for it —the more incentive a producer has to supply the product, because they will receive a higher profit.

Why does demand increase?

An increase in demand for a particular product in the market will cause the price of that product to rise. In turn, this will encourage firms to increase their output in order to make more profit, thus increasing the level of supply.

How does demand curve work?

When price is high, demand is low, so the curve begins at the top of the Y axis. As price decreases, demand increases, causing the curve to fall as it moves outward along the X axis. The downward-sloping demand curve reflects the maximum price that a consumer would pay for a product or service – also known as the reservation price – as well as the maximum amount of a product that a consumer would pay for a certain price. Demand curves also show consumer surplus, or the difference between the maximum cost a consumer is willing to pay and the actual market price, according to Thomas McGahagan at the University of Pittsburgh.

What is the law of supply?

The law of supply is based on several assumptions. It assumes that the market is competitive , that the marginal benefit (the profit a seller makes from producing and selling one more product or service) is greater than the marginal cost which is the cost of producing and selling one more product or service.

What is supply and demand in economics?

The concepts of supply and demand form the basis of every initial Economics 101 lecture, as well the basis of a market-based economy. Markets are made up of sellers and buyers, and sellers provide supply to meet buyers’ demand. Supply refers to the amount of products or services offered by the market, while demand refers to ...

What is the law of demand?

In microeconomics – the field of economics concerned with the decision-making patterns of individual buyers and businesses – the law of demand states that when the cost of a product or good increases, demand for that product or service decreases and vice versa, when all other factors are equal.

Where is Linsay Evans?

Based in the Southwest, Linsay Evans writes about a range of topics, from parenting to gardening, nutrition to fitness, marketing to travel. Evans holds a Master of Library and Information Science and a Master of Arts in anthropology.