According to the law of supply, what happens to quantity supplied as price increases?

The law of supply states that, all other factors being equal, an increase in the market price of a good or service leads to an increase in the quantity supplied. This relationship occurs because higher prices typically signal to producers that they can earn more profit by increasing their output. As producers respond to the incentive of higher prices, they are likely to allocate more resources toward the production of that good or service, thus increasing the quantity supplied in the market.

When prices rise, it becomes financially viable for producers to potentially cover higher production costs and take on more production risks. This connection between price and quantity supplied underpins the upward-sloping supply curve commonly illustrated in economics, where quantity supplied moves in the same direction as price.

In contrast, if the price were to decrease, producers would likely reduce the quantity supplied, as lower prices may not justify the costs of production. A constant quantity supplied would suggest that producers are indifferent to price changes, which contradicts fundamental economic principles. Fluctuations in quantity supplied suggest instability and unpredictability in producers' responses, which is not characteristic of the straightforward relationship outlined by the law of supply.