Question

the reason of deacrrase in supply is
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Answer 1

Answer:

An dcrease in supply will cause an increase in the equilibrium price and a decrease in the equilibrium quantity of a good. 1. The decrease in supply creates an excess demand at the initial price. a. Excess demand causes the price to rise and quantity demanded to decrease.

Answer 2

Answer:

Decrease in "quantity supplied" is due to decrease in price.

While decrease in "Supply" can be due to various factors which increase production cost.

Explanation:

When we say 'decrease in supply', we usually refer to the whole supply curve shifting to the left. This means that the producer can supply less at the same price.

This can be caused because of following factors :

1) Increase in production cost can be due to increase in price of raw materials. So less will be produced at the same cost due to which the producer can supply less at the same price.

2) Natural conditions like drought. This will reduce the supply of goods (especially agricultural goods). So once again, the supply will be less at the same price.

3) Increase in Taxes. This will increase the per unit cost of goods. Thus, the producer will be able to supply less at the same price.