Law of Supply
Understanding the behavior of sellers provides some insight into the concept of supply.
For example, imagine Chuck's Chocolates, a firm that produces and sells chocolate bars. When the price of chocolate rises, Chuck will produce more chocolate bars.
Chuck's Chocolates | |
Price of chocolate bars increases | Quantity of chocolate bars supplied increases |
![]() |
![]() |
Other firms will act in a similar fashion. Economists call this relationship the law of supply.