The cause of increasing price of a good affecting the firms to increase production would be:
- The Law of supply states that at a higher price, the firms wish to produce more to earn higher revenue.
What is the law of supply?
The law of supply states how a change in price directly impacts the amount of that good's supply in the market when other factors remain the same.
In case the price of the good rises, the firms intended to generate more so that they can make greater revenue and profit.
This will lead the supply to increase but the consumers' demand fall when the prices increase leading to cause a fall in supply and this helps maintain the equilibrium in the market.
Thus, the above answer is correct.
Learn more about "Supply" here:
brainly.com/question/14292311
