i need to be able to explain it verbally and graphically
It will increase quantity demanded,but decrease quantity supplied.Demand will be more than supply, or shortage. It will be a preassure to raise price, because the buyers will offer more.So that it will go back to the old equilibrium.There will be no shift in both demand and supply.
Assuming it is a free market, the price declined to the new equilibrium price -- and the quantity supplied would fall.
We'll assume the price decline was due to reduced costs of supply. This means the supply curve shifted to the right. This caused more people to be willing to purchase ore, since there are now more profitable uses for it at the lower price. Equilibrium price is lower and quantity is higher under normally shaped demand and supply curves
It will increase quantity demanded,but decrease quantity supplied.Demand will be more than supply, or shortage. It will be a preassure to raise price, because the buyers will offer more.So that it will go back to the old equilibrium.There will be no shift in both demand and supply.
Assuming it is a free market, the price declined to the new equilibrium price -- and the quantity supplied would fall.
We'll assume the price decline was due to reduced costs of supply. This means the supply curve shifted to the right. This caused more people to be willing to purchase ore, since there are now more profitable uses for it at the lower price. Equilibrium price is lower and quantity is higher under normally shaped demand and supply curves
