Answer to Question #182380 in Microeconomics for tayaba

Question

In 2005 Earthquake has devastating effects on the economy. A lot of factories gets

destroyed, many people lost their life. Explain with the help of demand and supply

curves how an earthquake affects the market equilibrium and what is the new

equilibrium price and quantity.

Answer 1

Supply and demand decrease, the equilibrium price increases, and the equilibrium quantity decrease.