What does the law of supply state?

The law of supply indicates that, all else being equal, when the price of a good or service increases, producers are willing to supply more of it to the market. This relationship reflects the direct correlation between price and quantity supplied. Higher prices generally incentivize producers to increase production because they can potentially earn greater revenue, which encourages them to allocate more resources toward creating that particular good or service.

In practical terms, when prices go up, it often means that the product is in higher demand, prompting producers to take advantage of that demand by increasing their output. Conversely, when prices drop, producers may scale back their production as the incentive to produce diminishes. This core understanding of market behavior highlights why the statement that producers will increase quantity supplied at higher prices is indeed correct within the framework of the law of supply.