For an example of the law of supply with market entry, consider the market for wolfram during World War II. Wolfram is an ore of tungsten, an alloy required to make heat-resistant steel for armor plate and armor-piercing shells. During World War II, the United States and its European allies bought up all the wolfram produced in Spain, thus denying the Axis powers Germany and Italy this vital military input. However, the wolfram-buying program was very costly to the Allied powers for two reasons:
The Allied powers had to outbid the Axis powers for the wolfram, so the price increased from $1,144 per ton to $20,000 per ton.
Spanish firms responded to the higher prices by supplying more wolfram. Workers poured into the Galatia area in Spain, where they used simple tools to gather wolfram from the widely scattered outcroppings of ore. This market entry increased the quantity of wolfram supplied tenfold. Because wolfram miners obeyed the law of supply, the Allied powers were forced to buy a huge amount of wolfram, much more than they had expected.