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.
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 for producers to make the product. This decrease in supply, with demand remaining constant, will lead to an increase in the equilibrium price (P) of X as the reduced supply meets the existing demand at a higher price point. Consequently, the equilibrium quantity (Q) of X will decrease because the higher price will likely reduce the quantity demanded.

In the Following Question You Are Asked to Determine, Other