Question

use clearly labelled diagrams to explain the effect to the equilibrium price and quantity of good x if the cost of producing good is increased?

Answer 1

Answer:

Explanation:

When cost of production rises, that leads to the overall costs the business rising which then causes a shift in the supply curve.

An Increased cost of production shifts the supply curve to the left side, indicating that the supply has decreased.

When supply curve shifts that changes the overall equilibrium as well.

This results in :-

equilibrium price increases

equilibrium quantity decreases.