What does the law of supply state about the relationship between price and quantity supplied?

The law of supply clearly establishes a direct relationship between price and quantity supplied. It states that as the price of a good or service increases, producers are willing and able to supply more of it. This is primarily due to the fact that higher prices can lead to greater potential revenue, encouraging producers to allocate more resources toward the production of that good.

Conversely, when prices decrease, the incentive for producers to supply the good diminishes. Lower prices may lead to reduced revenue, which can make it less attractive for producers to continue offering the same quantity or may cause them to reduce production altogether.

By understanding both aspects—more supply when prices are high and less supply when prices are low—it's clear that both points presented in the choices are true. Thus, the correct assertion encapsulates the full scope of the law of supply effectively.