Based on the law of supply, what happens when the price of a product rises?

• A. The quantity supplied decreases as price increases.
• B. The quantity supplied increases as price increases.
• C. Supply shifts to the left as price rises.
• D. Prices have no effect on supply.

Answer: (B)

When the price of a product rises, producers are motivated to produce and sell more because higher prices mean more profit per unit. The law of supply states that, all else equal, quantity supplied increases as price increases, so you move up the upward-sloping supply curve along with the higher price. A price change itself doesn’t shift the entire supply curve—that kind of shift happens due to non-price factors like input costs, technology, or expectations. So the quantity supplied goes up as price goes up. The other statements conflict with this relationship or describe the wrong type of change in supply.