Question

Explain the effect of the following on market supply of a good 1 increase input price 2 reduction in per unit tax

Answer 1

Explain the chain of effects of this change till the market again reachesequilibrium. ... Demand curve, remaining unchanged, if there isdecrease in supply, supply curve andequilibrium point will shift leftwards. As a result, equilibrium price will increase but equilibrium quantity willdecrease.