What happens to the supply curve when there is a decrease in production?
Price will increase.
Producers will produce more at each and every price.
Price will decrease.
Consumers will increase purchases at each and every price.
a. Price will increase. Understanding demand is only half of the story. To understand the market we also need to understand supply. [ And as on the demand side of the equation, the basic law of supply is common sense: as prices rise, supply (quantity of X on the market) increases; as prices fall, supply decreases. In other words, when the price for a good goes up, suppliers of that good will
produce more. When the price of a good goes down, suppliers produce less. ]
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