These inputs are also known as factors of production. If the price of inputs goes up, the cost of producing the good increases. And therefore at each price producers need to sell their good for more money. So an increase in the price of inputs leads to a decrease in supply.
Thereof, what happens when the price of a product goes down?
In perfect competition, the quantity demanded (demand) and the quantity supplied will be equal. If the supply increases, and the demand remains the same, there will be a surplus, and the price will go down. If the supply decreases, and the demand remains the same, there will be a shortage, and the price will increase.
What happens to demand when price increases?
Increases and decreases in supply and demand are represented by shifts to the left (decreases) or right (increases) of the demand or supply curve. Demand Decrease: price decreases, quantity decreases. Supply Increase: price decreases, quantity increases. Supply Decrease: price increases, quantity decreases.
What does the supply schedule show?
A supply schedule is a table that shows the relationship between the price of a good and the quantity supplied. The supply curve is a graphical depiction of the supply schedule that illustrates that relationship between the price of a good and the quantity supplied.