ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The supply a good decreases if the price of one of its complements in production falls. Resource and input prices influence the cost of production. And the more it costs to produce a good, the smaller is the quantity supplied of that good.

Detailed explanation-2: -Explain the effect that the slaughter of the cattle herds will have on the equilibrium price and quantity of chicken. As the price of beef decreases, consumers will buy more beef and less chicken. The demand for chicken will decrease, causing a decrease in the equilibrium price and quantity of chicken.

Detailed explanation-3: -Faced with higher prices of chicken at the supermarket, more consumers will choose substitutes for chicken–and the demand for beef will increase. The resulting equilbrium price of beef will be higher; the equilbrium quantity of beef will be lower.

Detailed explanation-4: -It’s a fundamental economic principle that when supply exceeds demand for a good or service, prices fall. When demand exceeds supply, prices tend to rise. There is an inverse relationship between the supply and prices of goods and services when demand is unchanged.