Explain one possible effect on the equilibrium market price of an increase in production costs for firms. (2 marks)

An increase in a firm's production costs might also mean a fall in a firm's willingness to supply a product, thereby resulting in a fall in the quantity of the product supplied, resulting in a new higher equilibrium market price for said product.

SH

Related Economics GCSE answers

All answers ▸

What are supply side policies and how do they effect the economy?


Explain why a government budget deficit is likely to stimulate economic growth.


How can a tax be represented in a simple demand and supply diagram?


What is an inferior good?