The law of supply states that higher prices lead to higher supply from "summary" of Basic Economics by Thomas Sowell
The law of supply is a fundamental principle in economics that explains the relationship between prices and the quantity of goods supplied by producers. According to this law, when the price of a good or service increases, producers are more willing and able to supply more of that good or service to the market. This is because higher prices mean higher profits for producers, which creates an incentive for them to increase their production. The reason behind this relationship is that higher prices make it more profitable for producers to allocate resources towards the production of a particular good or service. When prices are low, producers may not find it worthwhile to invest in producing more of a good or service, as the potential profits may not justify the costs involved. However, when prices increase, producers see an opportunity to earn higher profits, which motivates them to increase their production. As producers increase th...
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