ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Factors that can cause a decrease in supply include higher production costs, producer expectations and events that disrupt supply. Higher production costs make supplying a product less profitable, resulting in firms being less willing to supply the good.

Detailed explanation-2: -The supply curve can shift based on several factors including changes in production costs (e.g., raw materials and labor costs), technological progress, the level of competition and number of sellers/producers, and the regulatory & tax environment.

Detailed explanation-3: -Factors that can shift the supply curve for goods and services, causing a different quantity to be supplied at any given price, include input prices, natural conditions, changes in technology, and government taxes, regulations, or subsidies.

Detailed explanation-4: -A decrease in supply will cause the equilibrium price to rise; quantity demanded will decrease. To determine what happens to equilibrium price and equilibrium quantity when both the supply and demand curves shift, you must know in which direction each of the curves shifts and the extent to which each curve shifts.