Law of supply

[TrueTears]

I don't quite get WHY when the price of a good increases then the quantity supplied also increases?

Is it because the more quantity of a good that is supplied means a higher marginal cost to produce them, and if the price of the good increases then producers are willing to incur a higher marginal cost and thus increasing the production?

[superflya]

haha this business stuff just aint ur thing ey TT

loathed yr 10 commerce LOL

[TrueTears]

lol economics is fun as actually, it's well connected to maths which is why i like it.

fkn accounting or some shit is so confusing i dont understand shit

[superflya]

haha is that making balance sheets and all those liabilities,debtors and stuff?

[ReVeL]

I don't quite get WHY when the price of a good increases then the quantity supplied also increases?

Is it because the more quantity of a good that is supplied means a higher marginal cost to produce them, and if the price of the good increases then producers are willing to incur a higher marginal cost and thus increasing the production?

Always think of incentives. As the price of a product rises, the marginal benefit of producing increases with it (Marginal Revenue - Marginal Cost) providing an incentive for firms (both existing and new) to raise production in order to maximise their profits.

[TrueTears]

I don't quite get WHY when the price of a good increases then the quantity supplied also increases?

Is it because the more quantity of a good that is supplied means a higher marginal cost to produce them, and if the price of the good increases then producers are willing to incur a higher marginal cost and thus increasing the production?

Always think of incentives. As the price of a product rises, the marginal benefit of producing increases with it (Marginal Revenue - Marginal Cost) providing an incentive for firms (both existing and new) to raise production in order to maximise their profits.

Ahhh yeah, thanks revel!!