A supply curve is positively sloped because

Assessment: JAMB UTME - Economics - 2009 Subject: Economics

Question 1 Report

A supply curve is positively sloped because
Answer Details
A supply curve is positively sloped because "price is an incentive to producers". This means that as the price of a product increases, producers are willing to supply more of it to the market. This is because a higher price means that producers can earn more profit by supplying more of the product to the market. Therefore, a positively sloped supply curve shows that as the price of a product increases, the quantity supplied of that product also increases. On the other hand, if the price of the product decreases, producers will be less willing to supply the product to the market since the profit margin will be lower. As a result, the quantity supplied of the product will decrease. This relationship between price and quantity supplied is captured by the positively sloped supply curve.

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