In the law of supply, what is the general relationship between quantity supplied and price (ceteris paribus)?

Introduction / Context:
The law of supply is a basic principle in microeconomics that describes how producers respond to price changes. It is closely related to the shape of the supply curve and is often tested in introductory economics, business and marketing exams. Understanding this relationship helps explain why changes in market prices influence production decisions and quantities offered for sale.

Given Data / Assumptions:

• The analysis assumes ceteris paribus, meaning other factors such as technology, input prices and number of firms are held constant.
• We focus on the relationship between the price of a good and the quantity producers are willing to supply.
• Producers aim to maximise profit based on market prices and their cost structures.
• The question asks whether the relationship is direct, inverse or indeterminate.

Concept / Approach:
The law of supply states that, other things equal, the quantity supplied of a good tends to increase when its price rises and to decrease when its price falls. This means quantity supplied moves in the same direction as price. In mathematical terms, the relationship is directly proportional: higher price, higher quantity supplied; lower price, lower quantity supplied. This direct relationship underlies the upward slope of the supply curve from left to right.

Step-by-Step Solution:
Step 1: Consider producers facing higher prices for their product. At a higher price, each unit sold brings more revenue. Step 2: Higher revenue per unit makes it profitable to produce additional units, even if marginal production costs increase. Step 3: As a result, producers choose to supply a larger quantity when the price is higher. Step 4: Conversely, when price falls, it becomes less attractive to produce high volumes, and quantity supplied tends to decline. Step 5: This same direction movement of price and quantity supplied shows that the relationship is directly proportional, matching option A.

Verification / Alternative check:
For example, imagine a small bakery that sells bread at Rs 20 per loaf. At this price, the bakery finds it profitable to bake 100 loaves per day. If the market price rises to Rs 25 per loaf, the bakery can cover the extra cost of ingredients and labour needed to increase production to 130 loaves per day. If the price falls to Rs 15, the bakery might reduce production to 70 loaves because the profit margin is too thin at higher volumes. This practical behaviour illustrates a direct relationship between price and quantity supplied.

Why Other Options Are Wrong:
Option B claims an inverse relationship, which would mean quantity supplied falls when price rises, contradicting the standard law of supply. Option C states that the relationship cannot be determined, which is incorrect because the law of supply provides a clear direction under the ceteris paribus assumption. Option D, none of the above, is incorrect because one of the listed choices is correct. Option E suggests quantity supplied is always zero regardless of price, which is unrealistic and does not describe market behaviour. Only option A correctly states that the relationship is directly proportional.

Common Pitfalls:
A common confusion is between the law of demand and the law of supply. Demand usually has an inverse relationship with price, while supply has a direct relationship. Students sometimes mix these up. Another pitfall is forgetting that the law of supply applies under ceteris paribus conditions; large changes in technology or input prices can shift the supply curve itself. In exams, clearly state that for supply, price and quantity move in the same direction, indicating a direct proportional relationship.

Final Answer:
According to the law of supply, the relationship between quantity supplied and price is directly proportional.