18
QuizMultiple Choice

The Law of Supply and Demand — Quiz

Question 18 • Personal Finance and Economics

Which statement best explains the law of supply?

Answer
A
The quantity supplied by consumers decreases as prices rise and increases as prices fall.
B
The quantity supplied by consumers increases as prices rise and decreases as prices fall.
C
The quantity supplied by producers increases as prices rise and decreases as prices fall.
D
The quantity supplied by producers decreases as prices rise and increases as prices fall.

Explanation

The law of supply describes how producers respond to changes in price: when a good’s price rises, producers are generally willing to supply more of it; when the price falls, they supply less. This matches “the quantity supplied by producers increases as prices rise and decreases as prices fall.” Choices B and C describe consumers, while D reverses the relationship.

AI-written and checked against the verified answer.

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