14. Refer to Figure the image. If the current market price is $10, the market will achieve equilibrium by Show A) a price increase, increasing the supply and decreasing the demand. What will occur if a firm expects that the price of its product will be higher in the future than it is today?-If a firm expects that the price of its products will be higher in the future than it is today, it has incentive to decrease supply now (curve shifts to left), and increase supply in the future (curve would shift to the right).
What happens when supply decreases and price increases?If there is a decrease in supply of goods and services while demand remains the same, prices tend to rise to a higher equilibrium price and a lower quantity of goods and services. The same inverse relationship holds for the demand for goods and services.
What happens to supply when future price decreases?The supply curve demonstrates the relationship between a good's price and the quantity producers are willing and able to supply. The upward sloping line demonstrates this direct relationship: as the price rises, the quantity supplied increases; as price decreases, quantity supplied decreases.
What happens to supply when firms increase?When a firm's profits increase, it is more motivated to produce output, since the more it produces the more profit it will earn. So, when costs of production fall, a firm will tend to supply a larger quantity at any given price for its output. This can be shown by the supply curve shifting to the right.
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A firm has an incentive to decrease supply now and increase supply in the future if it expects that
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