What effect does a rise in the cost of machinery or raw materials have on the supply curve?
If the cost of machinery rises, it is more expensive to retrieve the raw materials and so it increases the cost of the good. 2. What does new technology generally do to production? It lowers cost and increases supply.
What is one reason European governments protect?
Answer Expert Verified. European government protects the growth of food by giving subsidies, in the form of direct payments or tax credits, to the local farmers even though imported food would be a cheaper option for them.
When any effort by government causes supply of a good to rise what happens to the supply curve for that good?
The product price is shown on the vertical axis on the graph and the quantity supplied is on the horizontal axis. When the government causes the supply of a good to rise, the curve will cause a shift to the right. hope this helps!
How do future expectations about the price of a good affect the present supply *?
How do future expectations about the price of a good affect the present supply? A. If the price is expected to increase and then decrease, most sellers will hold onto their supply until the decrease has occurred. If the price is expected to increase, many producers will hold onto their supply.
What effect does a rise in the cost?
Terms in this set (12) What effect does a rise in the cost of machinery or raw materials have on the cost of a good? The good becomes cheaper to produce. What does new technology generally do to production? It increases cost and decreases supply.
Why do prices go up when demand is high?
When there is more demand, prices will go up because many people want to buy the same item but there is not enough supply for it. When demands for new goods and services go up, new markets come into being. The greater the demand, the faster this happens.
Does lower demand increase price?
As we can see on the demand graph, there is an inverse relationship between price and quantity demanded. Economists call this the Law of Demand. If the price goes up, the quantity demanded goes down (but demand itself stays the same). If the price decreases, quantity demanded increases.
What happens when both supply and demand change?
If simultaneous shifts in demand and supply cause equilibrium price or quantity to move in the same direction, then equilibrium price or quantity clearly moves in that direction. As demand and supply curves shift, prices adjust to maintain a balance between the quantity of a good demanded and the quantity supplied.