What is the relationship between price and quantity supplied on a supply curve?

The relationship between price and quantity supplied on a supply curve is characterized by a direct relationship, which means that as the price of a good or service increases, the quantity supplied also increases. This principle aligns with the law of supply, which states that producers are willing to offer more of a product for sale at higher prices because of the greater potential for profit.

When the price rises, it signals to producers that there is heightened demand or profitability for their product. In response, producers may invest in additional resources, expand their operations, or increase their output to take advantage of the favorable market conditions. Thus, the upward slope of the supply curve effectively demonstrates this positive correlation between price and quantity supplied.

The other options present scenarios that contradict this fundamental economic principle. For instance, a decrease in price leading to an increase in quantity supplied contradicts the law of supply, as lower prices typically result in a reduction in the quantity that producers are willing to supply. Similarly, stating that there is no relationship or that quantity supplied remains constant ignores the observable patterns in market behavior. These alternatives fail to account for how producers react to changes in price in real-world markets.