The supply curve is upward sloping because of
A) increasing marginal cost.
B) decreasing marginal benefit.
C) decreasing marginal cost.
D) increasing marginal benefit.
E) increasing total cost.

Question

Quizplus · Accepted Answer

The supply curve is upward sloping because of increasing marginal cost. As a producer supplies more of a good or service, the cost of producing additional units increases due to diminishing marginal returns and the need to use additional resources that are less efficient. This increase in marginal cost leads to a higher price necessary for producers to supply more units.

The Supply Curve Is Upward Sloping Because of