Interpret the following statement: "An increase in the price of wheat will encourage farmers to increase the quantity of wheat supplied to the market."
A) The statement is correct.
B) The statement would be correct if "quantity of wheat demanded" were substituted for "quantity of wheat supplied."
C) The statement is incorrect because it confuses a change in quantity supplied with a change in supply.
D) The statement would be correct if it read that a "decrease in the price of wheat will encourage farmers to increase the quantity of wheat supplied to the market."

Question

Quizplus · Accepted Answer

The statement is correct because according to the law of supply, an increase in the price of a good typically leads producers to supply a greater quantity of that good to the market.

Interpret the Following Statement: "An Increase in the Price of Wheat