Question consider an abstract representation of the demand, Ask an Expert

Economics

Question: Consider an abstract representation of the demand and the supply for apples where a, b, c and d are positive parameters.

Demand: Q = a - b P + I

Supply: Q =d + e P - C

Consider the following statement. Which part of the statement is incorrect? Explain your answer.

"If the cost of input for production (C) increases, the supply curve will shift upward, resulting in a smaller equilibrium quatity and a higher equilibirum price of apples. Because the price of apples increases, the demand for apples will shift to the left."

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M92582494

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