Upward-Sloping Supply Due to Rising Marginal Costs

Steps:

• Individual supply curve slopes up as each additional unit costs more to produce (law of increasing costs).
• Market supply aggregates individual curves, shifting rightward with more growers but still upward-sloping.
• Higher output requires covering rising marginal costs, so prices must rise to induce more supply.
• Option A matches this by explaining price increases needed for output expansion.

Why A is correct:

• Law of supply: Higher prices are required to cover rising marginal costs for additional output, as shown by the upward slope.

Why the others are wrong:

• B: Contradicts supply curve; lower prices reduce quantity supplied, not increase it.
• C: Profitability varies with output levels due to differing marginal costs per unit.
• D: Too vague; supply responds to price changes, but doesn't explain the curve's shape or rising costs.

Final answer: A