Question

select the correct answer.
jack sells homemade chocolates and cookies. he expects the price of chocolates to increase around valentine’s day, so he prepares to make more chocolates in february. which economic concept lies behind jack’s decision to make more chocolates in february?
a. equilibrium
b. law of demand
c. law of supply
d. negative externality
e. positive externality

Explanation:

The law of supply states that, all else being equal, as the price of a good rises, the quantity supplied of that good also rises. Jack expects the price of chocolates to increase (due to Valentine's Day demand) and plans to supply more chocolates. This aligns with the law of supply.

• Equilibrium refers to a state where supply and demand are balanced. There's no indication of balance - just a supply response to expected price change.
• Law of demand is about quantity demanded and price (inverse relationship), not relevant here as Jack is a supplier.
• Negative externality is a cost imposed on a third - party (e.g., pollution from production). No such element in the scenario.
• Positive externality is a benefit to a third - party (e.g., a beautiful garden in a neighborhood). Not relevant to Jack's supply decision.

Answer:

C. law of supply