The more inelastic the demand for the product, the more a left shift in the supply curve of product x will raise equilibrium price. If the demand for bacon is reasonably elastic, a 10% drop in price will result in an increase in demand of more than 10%.
The equilibrium price will be higher than it was previously if the supply curve's shift to the left is more than the demand curve's shift, as shown in Panel. To a greater extent, the equilibrium price will increase with a shift to the left in the supply curve of product x. Higher worker pay in model.
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