<p>There is no contradiction.</p>

<p>The law of supply simply indicates a supply curve is upward sloping.  There is no prohibition against the curve itself moving so that it intersects demand in another location, so long as the slope remains positive.</p>

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2015-11-08T21:51:13.157Z
2015-11-08T21:51:13.157Z
RegressForward
<p>If demand for a product is elastic( consider the case when the price is low ), lowering the price further increases total revenue.  </p>

<p>However, as per the law of supply, low prices cause suppliers to supply less of this elastic demand product.  There will be a shortage and price must increase back to equilibrium price.  </p>

<p>Doesn't the law of supply invalidate "total revenue rises with price drops on goods with elastic demand"?</p>

<supply-and-demand><elasticity>
Does the law of supply reject rise in total revenue for goods with elastic demand?
user2738698
# Does the law of supply reject rise in total revenue for goods with elastic demand?

(Asked by: username_0 on 2015-11-08)

If demand for a product is elastic( consider the case when the price is low ), lowering the price further increases total revenue.

However, as per the law of supply, low prices cause suppliers to supply less of this elastic demand product. There will be a shortage and price must increase back to equilibrium price.

Doesn't the law of supply invalidate "total revenue rises with price drops on goods with elastic demand"?

**Tags:** supply-and-demand, elasticity

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## 1 answers

### Answer by username_1 on 2015-11-08. Score: 1

There is no contradiction.

The law of supply simply indicates a supply curve is upward sloping. There is no prohibition against the curve itself moving so that it intersects demand in another location, so long as the slope remains positive.


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