The demand in a market for smartphones has increased, causing prices to rise. What effect will this likely have on the supply of smartphones?
A.
The supply point will increase by moving along the existing supply curve, and the entire curve will shift upwards as well.
B.
The supply point will increase by moving along the existing supply curve; the curve itself will not shift.
C.
Supply will decrease, as always happens when price increases.
D.
The supply curve will shift up according to the increased demand.
B. The supply point will increase by moving along the existing supply curve; the curve itself will not shift.
D.
The supply curve will shift up according to the increased demand.
To determine the effect of increased demand and rising prices on the supply of smartphones, we need to understand the relationship between price and quantity supplied.
In general, the law of supply states that as the price of a good increases, suppliers are more willing and able to produce and sell more of that good. This means quantity supplied typically increases as price increases.
Based on this principle, the correct answer would be:
B. The supply point will increase by moving along the existing supply curve; the curve itself will not shift.
When demand for smartphones increases and prices rise, producers of smartphones are incentivized to produce and sell more units to take advantage of the higher prices. As a result, the quantity supplied of smartphones will increase along the existing supply curve, but the overall supply curve itself will not shift. This is because the supply curve represents the relationship between price and quantity supplied for a given market, and a change in demand (in this case, increased demand) does not directly cause a shift in the supply curve.