What is indicated by an upward sloping supply curve?

An upward sloping supply curve illustrates the positive relationship between price and quantity supplied. This indicates that when the price of a good or service increases, producers are incentivized to supply more of it to the market. The rationale behind this behavior is based on the profit motive; higher prices generally lead to higher potential profits for suppliers. As the price rises, existing producers may be willing to increase their output, and new producers may enter the market, thus enhancing overall supply.

In contrast, options that imply a decrease in quantity supplied with rising prices or that suggest a lack of responsiveness to price changes do not align with the fundamental principle represented by the upward sloping supply curve. The concept captures how suppliers adjust their production levels in response to changing prices, highlighting the dynamic interaction between market prices and supply.