What is the effect on the price and quantity of wooden desks of a rise in the price of wood?

Question

Quizplus · Accepted Answer

A rise in the price of wood will result in an increase in the cost of production of wooden desks. As a result, the supply of wooden desks will decrease. This decrease in supply will shift the supply curve to the left. The shift in the supply curve will cause a decrease in the equilibrium quantity of wooden desks. At the same time, the increase in the cost of production will cause firms to charge a higher price in order to maintain their profits. This increase in price will shift the demand curve to the left. The shift in the demand curve will cause a decrease in the equilibrium quantity of wooden desks. Therefore, the equilibrium quantity of wooden desks decreases and the equilibrium price rises.

What Is the Effect on the Price and Quantity of Wooden