The price of blue widgets rises to $6. assuming that all other factors remain the same, how should the factory respond to this increase of price?

The law of supply states that there is a positive relation between the price and the quantity supplied.

In a given situation, if all other factors remain the same, the factory should also raise the price of their end product and also increase the supply of more blue widgets.

The Law of supply states that there is a positive relation between the price and the quantity supplied,  means if the prices of a particular commodity increases, the supplier will supply more of the commodity and vice versa.

As per the given situation, If the company does not do not increase the Prince, they will receive a loss of $6 margin for every product that they sold.

Therefore, Due to the law of supply, the factory should raise the supply of  blue widgets.

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answer; (73%);

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