Unit 2.2 · Supply
The Law of Supply
AO2
Syllabus Requirement
The direct relationship between price and quantity supplied, assuming ceteris paribus.
Assessment Objectives
AO2Application and Analysis
Summary
The law of supply describes how the quantity of goods or services that firms are willing to sell changes in relation to price. It indicates that as prices rise, the quantity supplied typically increases, assuming other factors remain constant. This relationship is important for understanding market behavior and firm decision-making in economics.