Answer to Question #311129 in Economics of Enterprise for Phume

Question

The population in country C decreases due to a lower birth rate.at the Sametime there is an increase in the cost of fertilizer which is used to grow vegetables. Explain how the market for vegetables will be affected by these changes

Answer 1

A decrease in population translates to a shift in the demand curve inwards reducing the quantity demanded of the vegetables at lower price. On the other hand, an increase in the cost of fertilizers leads to a shift in the supply curve inwards also leading to a reduced quantity supplied of the vegetables. The overall result of this is reduced demand for the vegetables.