ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -As the number of firms in a market decreases, the supply curve will shift to the left and the equilibrium price will rise.

Detailed explanation-2: -In terms of total supply to a market, the number of firms in the market will affect the total supply. New firms in a market will increase market supply and firms leaving will reduce supply.

Detailed explanation-3: -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. Expectations about future prices influence supply.

Detailed explanation-4: -The law of supply states that a higher price leads to a higher quantity supplied and that a lower price leads to a lower quantity supplied.

Detailed explanation-5: -The decrease in supply creates an excess demand at the initial price. a. Excess demand causes the price to rise and quantity demanded to decrease. 1.