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Ivan
3 years ago
11

Suppose that an increase in production costs decreases the supply of wheat, such that less wheat is supplied at each price level

. The new equilibrium quantity (after the decrease in supply) is
History
2 answers:
mestny [16]3 years ago
7 0

Equilibrium quantity happens when the market's demands are being met by the supply. In the case presented, the wheat production will fall, making the supply lower than before. This will cause the price to rise, at the same time maintaining the profit and halting the consumption by the market.

Although, with time the suppliers may make enough profit with the new prices so that production will start rising again and making the prices lower but not as low as before; the equilibrium quantity will happen when the demand gets bigger because of relatively better prices.

AleksAgata [21]3 years ago
6 0
If the demand will remain the same for the certain period of time then the supply decreases. The price will spike because the product has the less demand. <span> As supply increases, prices will move lower because the product is readily available. </span>
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