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Effect on supply, equillibrium price & quantity in short-run

For each of the following changes, show the effect on the supply curve, and state what will happen to market equilibrium price and quantity in the short run.

a. The government requires pollution control filters that raise production costs.
b. Wages of workers in this industry fall.
c. There is an improvement in technology.
d. The price of the product falls.
e. Producers expect that the price of the product will fall in the future.

Solution Preview

For each of the following changes, show the effect on the supply curve, and state what will happen to market equilibrium price and quantity in the short run.
a. The government requires pollution control filters that raise production costs.
Increase in production cost means that the supply curve will shift upward (to the left). The suppliers will supply less quantity for each price points. Thus, the ...

Solution Summary

Answers the conceptual questions regarding the influnce of events under question on supply cruve and price and quantity under equilibrium in short run.

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