A factory that provides 80% of all computer chips has been shut down for maintenance. in the computer chip market this will lead to

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Business

Eliza Munoz

29 October, 21:15

A factory that provides 80% of all computer chips has been shut down for maintenance. in the computer chip market this will lead to

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Kirsten Kent · Answer 1

If the factory that supplies 80% of all computer chips is shut down for maintenance, the resultant effect in the computer chip market will be decreased supply of computer chips (scarcity). Furthermore, a decrease in supply of a product in an efficient market leads to an increase in price.

So in essence, the supply of computer chips will decrease and the equilibrium price will increase. This is the essence of the demand curve