The law of supply states that an increase or decrease in the price of a good will increase or decrease the amount producers are willing and able to produce and sell. This relationship indicates that, all else being equal, higher prices motivate producers to supply more of a good, while lower prices lead to a decrease in the quantity supplied.
This principle can be attributed to the potential for higher profits at increased prices, which incentivizes producers to allocate more resources towards the production of those goods. Conversely, when prices fall, the incentive diminishes, leading to a reduction in supply as producers may not find it financially viable to continue producing at those lower price levels.
In summary, the law of supply illustrates the direct relationship between price and quantity supplied, marking it a fundamental concept in economics.