Question : Assertion: The law of supply states that as the price of good increases, the quantity supplied of that good also increases.
Reason: The law of supply is based on the positive relationship between price and quantity supplied, assuming other factors remain constant.
Option 1: Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
Option 2: Both the assertion and reason are true, but the reason is not a correct explanation of the assertion.
Option 3: The assertion is true, but the reason is false.
Option 4: The assertion is false, but the reason is true.
Correct Answer: Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
Solution : The correct answer is (a) Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
The law of supply states that as the price of a good increases, the quantity supplied of that good also increases, assuming other factors remain constant. This positive relationship between price and quantity supplied is the basis of the law of supply. When the price of a good rises, suppliers have a greater incentive to produce and sell more of that good, leading to an increase in quantity supplied.
Therefore, both the assertion and reason are true, and the reason correctly explains the assertion.
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