Answer: D. A factory stops making a brand of phone after the phones price decreases
Explanation:
The situation best illustrates an effect of the law of supply “A factory stops making a brand of the phone after the phone's price decreases”. Therefore, option D is the correct option.
The law of supply states that when the price of a commodity or service increases their availability in the market because the manufacturers and the service providers get better prices for them therefore, they generate more.
The concept of the law of supply was proposed in the year 1890 by Alfred Marshall. The law of demand and supply drives the whole market. The needs and manufacturing of goods and services are determined by market sentiments.
The case "A manufacturer stops creating a brand of phone once the phone's price lowers" best exemplifies how the law of supply operates. As a result, choice D is the best one.
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