Respuesta :
The given statement is false. Without a complete reversal of whatever external event caused the supply to decline, it does not immediately return to the initial equilibrium.
What is equilibrium?
Economic equilibrium in economics refers to a scenario where supply and demand are balanced and the values of economic variables do not change in the absence of external factors.
The Supply Demand framework is used to study changes in equilibrium in a free market. According to the law of supply, the quantity that businesses are willing to supply at various market prices is represented by an upward-sloping supply curve. The quantity that customers are willing to buy at various market prices is represented by the downward-sloping demand curve, which obeys the law of demand.
If the supply of X declines for reasons unrelated to shifting demand, it could be for a variety of reasons, including changes in the cost of raw materials, wage rates, or emerging technologies. A shift in the supply curve reflects such changes. Lower X supply results in a left shift in the supply curve. The link between pricing and demand has no effect on the demand curve, which remains the same.
Price increases and quantity decreases because the supply curve moves to the left while the demand curve does not. Without a complete reversal of whatever external event caused the supply to decline, it does not immediately return to the initial equilibrium. Because of this, the claim is untrue.
Hence, The given statement is false.
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