A supply is a good or service that producers are willing to provide. The law of supply determines the quantity of supply at a given price.
What is the law of supply in economics?
The law of supply is a theory in economics that indicates a direct relationship between price and supply. It suggests that all factors remaining constant, if the price of a commodity increases, it leads to an increase in its market supply and vice-versa. This is because sellers will try to gain maximum profit by increasing sales.
What is the law of supply and demand?
The law of supply and demand states that, for a given product, if the quantity demanded exceeds the quantity supplied, then the price increases, which decreases the demand ( law of demand) and increases the supply ( law of supply )—and vice versa—until the quantity supplied equals the quantity demanded.
