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AS economics help!

(edited 8 years ago)

Factors that affect demand/supply talk about what causes a SHIFT IN THE CURVE.

So the strike causes supply to shift - the level of output for the same input decreases ie it costs more to produce, or in this case less can be produced for the same costs.

A contraction in demand is movement along the curve rather than a shift.

Reply 2

sunnydespair

Nickel mine is the supplier. So the supply will shift down.

Demand will not change as the consumer's demand is not influenced by the change in the supplier's situation

Reply 3

blondelocks

Original post by sunnydespair

Nickel mine is the supplier. So the supply will shift down.

Demand will not change as the consumer's demand is not influenced by the change in the supplier's situation

Thanks.

Reply 4

MaxRA

I'm doing AS as well, Yeah I think it would cause the Supply curve to shift to the left as supply would decrease.
However I don't think this would affect the demand in any way

Reply 5

Indigo.Brownhall

Yes, since it is the suppliers that are having the problem, then the Supply line would go to the left. Of course, this would still have a high demand, pushing the price up to P1.