Question

The supply curve measures:

Group of answer choices

the minimum price that a buyer is willing to pay for one unit of a good

the maximum price that a buyer is willing to pay for one unit of a good

the minimum price that a seller is willing to accept in return for selling a unit of a good

the maximum price that a seller is willing to accept in return for selling a unit of a good

Answer 1

The supply curve gives the relationship between prices and the quantity supplied at those prices.

Now, in order to produce a good, the supplier has to bear many costs.So, he decides a reservation price i.e. minimum price that he should get at which he will be willing to sell a unit of good. If he gets a price greater than the reservation price at that unit, then it is good and it will be a part of his surplus. But if the price is below his reservation price, he will not be interested in selling the good itself.

So, the supply curve is plotted by considering the reservation price of the seller at each unit.It measures the minimum price at which sellers will be willing to sell the good.

Ans.c. the minimum price that a selller is willing to accept in return for selling a unit of a good.