According to the law of supply, what happens when the price of a good increases?

The law of supply states that, all else being equal, an increase in the price of a good leads to an increase in the quantity supplied. This relationship is grounded in the idea that suppliers are generally more willing to produce and sell more of a good when they can receive a higher price for it. Higher prices typically indicate greater potential profit, which incentivizes producers to increase their output to maximize their revenue.

This principle reflects a direct response of producers to market prices; as prices rise, it becomes more profitable for them to allocate resources toward the production of that good, thereby increasing its quantity supplied. This response can be seen in various markets, where suppliers adjust their production levels based on price signals, leading to a movement along the supply curve rather than a shift of the curve itself.

In contrast, other options do not capture the essence of the law of supply. An increase in price does not directly cause a decrease in quantity demanded but rather affects the supply side of the market dynamics. Similarly, the overall demand in the market is not influenced by changes in the price of a good itself, and a shift of the supply curve to the left would typically indicate a decrease in supply, which is contrary to what occurs when prices rise.