In the following question you are asked to determine,other things equal,the effects of a given change in a determinant of demand or supply for product X upon (1)the demand (D)for,or supply (S)of,X; (2)the equilibrium price (P)of X;and (3)the equilibrium quantity (Q)of X. Refer to the given information.An increase in the prices of resources used to produce X will:

Question

Quizplus · Accepted Answer

An increase in the prices of resources used to produce X will decrease the supply (S) of X because it becomes more costly to produce. This decrease in supply, with demand remaining constant, will lead to an increase in the equilibrium price (P) of X as the market adjusts to the lower availability of X. However, the higher price will lead to a decrease in the equilibrium quantity (Q) of X sold, as the higher price reduces the quantity demanded.

In the Following Question You Are Asked to Determine,other Things