The law of supply is one of the most fundamental principles in microeconomics. According to the law of supply, for all other things remaining constant, the higher the price of a good or service, the higher the supply. Producers want to produce more of that good or service at the higher price to increase profits. Conversely, the lower the price, the lower the supply.If you were to graph this relationship with the quantity supplied on the x-axis and the price on the y-axis, the relationship between price and supply is graphed as an upward sloping curve from left to right. This line is referred to as a supply curve. Movement along the supply curve is referred to as supply expanding or contracting as price changes. Weslia Corp produces electric cars. At a price of $20,000, Weslia produces 5,000 cars. If the price increases to $25,000, Weslia will produce 6,000 electric cars. The higher price induces them to build more cars. The law of supply is a theoretical concept. In real life, variables do not remain constant. Things other than price can affect supply, such as prices of related goods, availability and price of raw materials. Assume Weslia builds a new, more efficient factory. It is now able to produce 6,000 electric cars at the $20,000 price. The supply curve shifts down and to the right. The quantity supplied changed because of an external factor instead of a change in price.