What does the law of supply describe?

The law of supply describes the relationship between price and quantity supplied, indicating that, all else being equal, an increase in the price of a good or service will result in an increase in the quantity supplied. Similarly, if the price decreases, the quantity supplied tends to decrease as well. This relationship reflects the willingness of producers to offer more of a product at higher prices, as they are incentivized by the potential for greater revenue.

In markets, this law helps to explain producer behavior and the dynamics of how supply responds to price changes. When prices rise, suppliers are more likely to produce and sell larger quantities, as they seek to maximize their profits. Thus, the law of supply is fundamental in understanding how markets operate and how supply ultimately interacts with demand to determine market equilibrium.