The situation that perfectly illustrates the effect of the law of supply is the increase in the number of cars for sale when the car dealership increases.
Option C is the correct answer.
What is meant by supply?
Supply refers to the products that are being manufactured by the producer for sale in the market.
The law of supply states that if the price of products available in the market tends to increase, then the suppliers will also produce more products. This shows a direct relationship between the price of goods and the quantity sold.
Therefore, the law of supply can be figured out from the increase in car dealerships, then the seller is provided with the high-cost cars.
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