Michael is the owner of a steel refinery in Pittsburgh, PA. The market (his sales) price for a ton of steel increased from $400 per ton in October to $600 per ton in November. According to the law of supply, what would be a rational response by Michael to this change in the market price for steel?

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Business

Hester

30 January, 17:09

Michael is the owner of a steel refinery in Pittsburgh, PA. The market (his sales) price for a ton of steel increased from $400 per ton in October to $600 per ton in November. According to the law of supply, what would be a rational response by Michael to this change in the market price for steel?

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Lucky · Answer 1

Supply refers to the quantity of goods and service that the supplier is willing to sell at a particular price and period. The law of supply states that an increase in price of a good or service will increase the quantity that the supplier is willing to supply provided that all other things are equal. Going by this law Micheal's response will be to Hire additional workers and increase his output or pay his workers overtime wages to increase working hours to increase output in other for him to make more profits.