Question

Which of the following demonstrates the law of supply? When the price of soccer balls rose, soccer balls sellers increase their quantity supplied of soccer balls. When salt prices rose, salt sellers decreased their quantity supplied of salt. When shirts producers expected shirt prices to rise in the near future, they decreased their current supply of shirts. When computer production technology improved, computer producers increased their supply of cars.

Answer 1

Answer:

The correct answer is: When the price of soccer balls rose, soccer balls sellers increase their quantity supplied of soccer balls.

Explanation:

The law of supply states that other things being constant, there is a direct and positive relationship between price and quantity supplied. So when price increases the quantity supplied increases and vice versa.

In the given example, the price of soccer balls is increasing. Because of this rise in price the sellers are increasing the quantity supplied of soccer balls. This demonstrates the law of supply.