Question

which of the following is an example of the law of supply?
a a milling company builds a new factory to process flour to export.
b a catering company buys a new dishwasher to make its work easier.
c the price of a sandwich increases and the sandwich shop increases the quantity supplied.
d a food producer increases the number of acres of wheat he grows to supply a milling company.

Explanation:

The law of supply states that, ceteris paribus, as the price of a good increases, the quantity supplied of that good increases. Option C shows that when the price of sandwiches rises, the sandwich shop increases the quantity supplied, which matches the law of supply. Option A is about expanding production capacity for export (not directly price - quantity supplied relation), Option B is about a company buying equipment for easier work (not related to supply law), Option D is about increasing input (acres of wheat) to supply another company (not a direct price - quantity supplied response).

Answer:

C. The price of a sandwich increases and the sandwich shop increases the quantity supplied.