In the long run,the quantity supplied of most goods
A)will increase in almost all cases,regardless of what happens to price.
B)cannot respond at all to a change in price.
C)can respond to a change in price,but the change is almost always inconsequential.
D)can respond substantially to a change in price.

Question

Quizplus · Accepted Answer

The quantity supplied of most goods can respond substantially to a change in price. This is because as the price of a good increases, the producers have an incentive to supply more of it to the market in order to earn more profit. On the other hand, as the price of a good decreases, producers have a disincentive to supply more of it to the market because it will bring in less profit. Therefore, the higher the price, the greater the quantity supplied and the lower the price, the smaller the quantity supplied. This phenomenon is represented by the upward sloping supply curve in the supply and demand model.

In the Long Run,the Quantity Supplied of Most Goods