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
Answered by Leonie R. Economics tutor

9227 Views

See similar Economics GCSE tutors

Related Economics GCSE answers

All answers ▸

Explain why demand for food is relatively price inelastic?


are technological developments making perfect competition more realistic


Why is the demand for food relatively price inelastic?


Using Figure 5, assess whether the decision to install the machine (used in production in an independent fast food shop) will be beneficial for the business and the workers.


We're here to help

contact us iconContact ustelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

© MyTutorWeb Ltd 2013–2025

Terms & Conditions|Privacy Policy
Cookie Preferences