Question

Q5 - Mary has just stated that normally, as price rises, supply will increase. Her teacher grimaces. Why? (Hint: Is this a shift factor of supply, or is it a change in price along a supply curve?)

Answer 1

Here when Mary normally says that as prices the supply increases then this is not a completely true statement because Accordingto law of supply if other things are held constant then if price increases them quantity supplied will increase not the supply

If more than the price factors are involved like

Expectation level of suppliers

Presence of technology in the market

Number of competitors in the market etc

Then it causes the change in the supply change

The quantity supply is shown by the movement on the supply curve but change in supply causes shift on the supply curve either leftwards or rightwards