Question

Market for a product is in equilibrium. Supply of the product decreases.Explain the chain effects of this change till the marker again reaches equilibrium.

Answer 1

The supply curve can shift position

If the supply curve shifts to the right, this is an increase in supply; more is provided for sale at each price

If the supply curve moves inwards, there is a decrease in supply meaning that less will be supplied at each price

Make sure that you understand the key factors that can bring about a shift in the supply curve for a product.