Because there is a positive relationship between quantity supplied and price

Because there is a positive relationship between quantity supplied and price.

The theory of the firm explains that when goods are sold at a higher price, producers will be more willing to produce goods or services. In conclusion, higher prices will give the producers incentive to produce more.

For example,

At Price = 20, producers are willing to produce 200 goods. At Price = 25, producers are now willing to produce 300 goods. At price 15, producers are less willing, and they produce only 100 goods.

This is a very simplistic example. A more elaborate one would include functions like the supply function and demand function and the price function.