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The supply curve of a typical good slopes upward to the right. This positive slope reflects the fact that:
Ahigher price is matched by a larger quantity supplied
Bhigher price is matched by a smaller quantity supplied
Cthe cost of production keeps rising over a period
Dbuyers always demand more when the price increases
Answer & Solution
Correct answer: A. higher price is matched by a larger quantity supplied
1. The supply curve plots price (vertical) against quantity supplied (horizontal).
2. The law of supply gives a direct price-quantity relationship.
3. A direct relationship produces a curve that rises to the right (positive slope).
4. So a higher price is matched by a larger quantity supplied.
_Source: ICAI BoS CA Foundation Paper 4 Business Economics, Ch 2 Unit III "Supply", p.3_
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