Explain one possible effect on the equilibrium market price of an increase in production costs for firms

An increase in production costs will result in an increase in the equilibrium price. This is because the increase in production cost means that firms will be less willing to supply and therefore there will be a fall in supply. As the market supply curve has shifted left this causes the equilibrium market price to rise.

LR

Related Economics GCSE answers

All answers ▸

Evaluate the case that economic growth is always beneficial to a country


What is meant by the different sectors of economies?


What is productive efficiency?


Explain how a monopoly affects competition in a market