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If demand remains constant and supply decreases, then the price will rise.
The law of supply and demand says that a price will move either up or down based on the balance of supply and demand.
As the supply decreases, prices will move higher because the product is more scarce. As supply increases, prices will move lower because the product is readily available.
For instance, suppose there is a drought and wheat is in short supply. The price of flour and bread will increase because people still want to buy them but they are in short supply. On the other hand, if there is a bumper crop and wheat is plentiful, the cost will drop as farmers compete to sell their crops.
Prices are also affected by demand. Several years ago, Beanie Babies were in great demand as collector items so prices soared. Today, however, the demand is much lower so prices have dropped greatly (with basically the same supply on the market).
Wiki User
∙ 16y ago
Wiki User
∙ 15y agoWhen the initial price to produce a product decreases, the supply will increase, and Demand will decrease.
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If demand decreases and supply is constant what happens to the equilibrium price?
If demand decreases and supply is constant, the price will increase.
What happens when the supply of a product decreases?
Price increses
What happens to both the supply and demand as the price decreases?
If the price decreases then the economic law of demand & supply comes in operation with increase in demand and decrease in supply, as the producer will not supply at the price unsuitable to them in the market .
According to Adam Smith what happens when the supply of a product increases?
The price decreases.
What happens to the equilibrium price when demand increases and supply decreases?
It goes up
If demand decreases and supply is constant what happens to the equilibrium price?
If demand decreases and supply is constant, the price will increase.
What happens when the supply of product decreases?
Price increses
What happens when the supply of a product decreases?
Price increses
What happens to both the supply and demand as the price decreases?
If the price decreases then the economic law of demand & supply comes in operation with increase in demand and decrease in supply, as the producer will not supply at the price unsuitable to them in the market .
According to Adam Smith what happens when the supply of a product increases?
The price decreases.
What happens when the supply of product decreases according to Adam smith?
The price increases
According to Adam Smith what happens when the supply of a good decreases?
The price increases-
What happens to the equilibrium price when demand increases and supply decreases?
It goes up
What happens to the equilibrium price and equilibrium quantity if the demand decreases and the supply is constant?
price rises and quantity increases
What happens to the equilibrium price levels and real GDP when aggregate demand decreases and aggregate supply increases?
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What happens when he supply of a noperishable good is greater than the consumer wants to buy?
The price will decrease until the supply decreases or the consumer wants more of it.
What would happen to the supply The price of the commodity decreases?
If supply of a commodity decreases, the supply will fall. Prices and supply of good have positive relationship.
