In microeconomics, why does a typical supply curve slope upward from left to right?

Introduction / Context:
The upward slope of the supply curve is one of the most basic ideas in microeconomics. It reflects how producers respond to changes in price when deciding how much of a good or service to offer for sale. Understanding this reasoning is important for exams and interviews related to economics, business and marketing, because it connects pricing, costs and producer behaviour.

Given Data / Assumptions:

• We are analysing a competitive market for a particular good or service.
• At each possible market price, firms decide how much quantity they are willing to supply.
• Production involves costs that generally increase as output expands in the short run.
• Firms aim to maximise profit, given their costs and market prices.

Concept / Approach:
The law of supply states that, other things being equal, the quantity supplied of a good tends to increase when its price rises and to decrease when its price falls. The reason is that a higher price makes it more profitable to produce and sell additional units. Producers are then more willing to use extra resources, work additional shifts or bring higher cost capacity into operation. As a result, the supply curve, which shows the relationship between price and quantity supplied, slopes upward from left to right.

Step-by-Step Solution:
Step 1: Consider a firm that faces a cost structure where producing extra units requires higher variable costs, such as paying overtime or using less efficient equipment. Step 2: At low market prices, the firm may find it profitable to produce only a small quantity because additional units do not cover their higher marginal cost. Step 3: When the market price increases, each unit sold brings more revenue, so it becomes profitable to produce more units, even if marginal cost is higher. Step 4: As a result, the firm chooses a higher quantity supplied at the higher price, and across the market many firms respond similarly. Step 5: Plotting these price-quantity combinations gives an upward sloping supply curve, consistent with option A.

Verification / Alternative check:
Suppose the selling price of wheat rises significantly due to strong demand. Farmers may respond by planting more wheat, using more fertiliser or shifting land from other crops to wheat, thereby increasing the quantity supplied. If the price later falls, the incentive to produce as much wheat declines, and farmers shift land back or reduce inputs. This real world example shows that price increases encourage greater supply, while price decreases discourage it, confirming the logic behind an upward sloping supply curve.

Why Other Options Are Wrong:
Option B suggests that quantity supplied increases over time regardless of price, which ignores the role of price incentives and is not a reason for the slope of the curve. Option C claims that higher input prices increase supply, but in reality higher input costs tend to reduce supply by making production less profitable at each price. Option D states that total cost always falls as more is produced, which is not generally true; marginal costs often rise. Option E attributes supply decisions entirely to government controls, which does not describe a competitive market. Only option A correctly explains that higher prices give producers an incentive to supply more.

Common Pitfalls:
Students sometimes confuse movements along the supply curve, caused by price changes, with shifts of the supply curve caused by factors like technology or input prices. Another mistake is to think the supply curve must always be upward sloping; in some special cases it can be vertical or even backward bending, but the standard case in basic microeconomics is upward sloping because of profit incentives and rising marginal costs. In exams, clearly relate higher prices to higher profitability and thus greater willingness to supply.

Final Answer:
A typical supply curve slopes upward because an increase in price gives producers an incentive to supply a larger quantity.