Question

The supply curve is upward sloping because __________.

• A. costs increase when the price increases
• B. quantity demanded decreases when price increases
• C. As the price increases, suppliers can justify producing at higher marginal costs
• D. All of the above

Answer 1

The correct option is C

As the price increases, suppliers can justify producing at higher marginal costs

The supply curve is upward sloping because as price increases, suppliers can justify producing at higher marginal costs as long as MC < P.