Answer to Question #125688 in Microeconomics for dawid

Question

Explain the effect on equilibrium price and quantity of a rise in shipping insurance premiums

Answer 1

Rise in shipping insurance premiums is a measure that is likely to cause a negative effect on labour therefore resulting to increase on cost of production. This will result to decrease in quantity supplied.

Decrease in supply makes the equilibrium shift to the left of supply curve hence increase in equilibrium price.