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 highlights that, all else being equal, an increase in price leads to an increase in quantity supplied due to higher potential profits for firms. Understanding this relationship is essential for analyzing market behavior in economics.