- #1
Kyoma
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Economics:
The Law of supply states that there is a direct relationship between price and quantity supplied, ceteris paribus. That is to say when all other variables are held constant, when price increases, quantity supplied also increases.
But from my common knowledge, when quantity supplied increases (there is an increase in supply), prices will go down. This can also be shown on the supply curve graph.
Isn't the Law contradicting itself??
I'm a beginner in economics.. have not learned elasticity etc. so, I'm not sure. :(
The Law of supply states that there is a direct relationship between price and quantity supplied, ceteris paribus. That is to say when all other variables are held constant, when price increases, quantity supplied also increases.
But from my common knowledge, when quantity supplied increases (there is an increase in supply), prices will go down. This can also be shown on the supply curve graph.
Isn't the Law contradicting itself??
I'm a beginner in economics.. have not learned elasticity etc. so, I'm not sure. :(