Fall in supply - effect on equilibrium price, Managerial Economics

Fall in Supply

1070_fall in supply.png

When the supply falls, the supply curve shifts to the left to position S1S1.  At the initial equilibrium price P1, quantity supplied falls from q1 to q21 but the quantity demanded is still q1. This creates excess of demand over supply which causes price to rise to a new equilibrium level P21 and quantity to fall to a new equilibrium level q21 and quantity to fall to a new equilibrium level q2.

Posted Date: 11/27/2012 6:21:41 AM | Location : United States







Related Discussions:- Fall in supply - effect on equilibrium price, Assignment Help, Ask Question on Fall in supply - effect on equilibrium price, Get Answer, Expert's Help, Fall in supply - effect on equilibrium price Discussions

Write discussion on Fall in supply - effect on equilibrium price
Your posts are moderated
Related Questions
is the sales maximization applicable

THE KEYNESIAN THEORY OF CONSUMPTION FUNCTION The theory was developed during the Great Depression which plagued Europe and America.  During this time, there was excess capacit

a)      The production-possibilities curve is? b)      If there is a shortage in the provider of a product, we can conclude that its price: c)      An enhance in supply and a

limitations of managerial ecomomics

Define theVariable factor of production The input level of a variable factor of production can be diverse in the short run. Raw material inputs are believed as variable fact

Discuss and analyze following statement: When Burton Cummings graduated with honors from the Canadian Trucking Academy, his father gave him a $350,000 tractor-trailer rig. Rec

Internal and External factors of business operation External factors : A firm can't exercise any control over these factors. Thepolicies, plans and programmes of the firm m

Suppose market demand and supply are given by Qd = 100 – 2P and QS = 5 + 3P. If a price floor of $20 is set, what will be the size of the resulting surplus?

Rail Tours sells packaged tours on rail lines, including gourmet meals and a reserved bed. The most popular tours are in the autumn when colors are at their peak. The overnight pac

Based on the information given in the Canada Health Act as well as the information given in your Study Guide, write a description of how medical services are funded in Canada. Be s