Answer to Question #323686 in Microeconomics for Boss

Question

Decrease in population rate, increase in the cost of fertiliser, which

used to grow vegetables, explain how the market for vegetables will be

affected by theses changes

Answer 1

Population decrease lowers the labour supply for the vegetables and thus quantity supplied to the market decreases.

Also population decrease reduces the number of potential buyers in the market and thus lowering demand for vegetables.

Increase in the cost of fertilizer used to grow vegetables increases the cost of production of vegetables.This makes the farmers reduce quantity grown to fit their original cost and thus quantity supplied decreases.

When both demand and supply of vegetables decreases the market equilibrium falls.