Question

A firm's supply curve is upsloping because: consumers envision a positive relationship between price and quality....

A firm's supply curve is upsloping because:

consumers envision a positive relationship between price and quality.

the expansion of production necessitates the use of qualitatively inferior inputs.

mass production economies are associated with larger levels of output.

producers are incentivized to produce more output due to higher revenue potential
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Answer #1

Answer : The answer is option D.

When price rise then revenue increase. To get higher revenue by selling more at high price level the producers increase the production level. As a result, with high price level the quantity supplied increase in the market. This means that there is positive relationship between price and quantity supplied. And the upward sloping supply curve shows the positive relationship between price and quantity supplied. Therefore, option D is correct.

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