Question

select the correct answer.
jack sells homemade chocolates and cookies. he expects the price of chocolates to increase around valentines day, so he prepares to make more chocolates in february. which economic concept lies behind jacks decision to make more chocolates in february?
a. equilibrium
b. law of demand
c. law of supply
d. negative externality
e. positive externality

Explanation:

• Option A: Equilibrium is the balance between supply and demand, not related to Jack's production decision based on expected price increase.
• Option B: Law of demand relates to consumers' quantity demanded and price, not producers' supply decisions.
• Option C: Law of supply states that as price is expected to increase (for chocolates around Valentine's Day), producers (Jack) will increase the quantity supplied (make more chocolates), which matches Jack's decision.
• Option D: Negative externality is a cost imposed on others, not relevant here.
• Option E: Positive externality is a benefit to others, not relevant here.

Answer:

C. law of supply