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Answer the Following Question. Show with the Help of Diagrams, the Effect on Equilibrium Price and Quantity When: There is a Rise in the Prices of Inputs. - Economics

Short Note

Answer the following question.
Show with the help of diagrams, the effect on equilibrium price and quantity when:
There is a rise in the prices of inputs.

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Solution

With a rise in the price of the input, the cost of production will increase and profit will fall. With a fall in profit rate supply will decrease.
A new equilibrium will be established which will be at a higher price, lower quantity demand and lower supply.

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