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

9225 Views

See similar Economics GCSE tutors

Related Economics GCSE answers

All answers ▸

Explain why the demand for food has an inelastic PeD.


Why should the government consider the price elasticity of demand when imposing tax on goods?


Explain a benefit of international trade for UK consumers


What are economies of scale?


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