Edward Millner's blog. It contains links to articles for students taking Principles of Microeconomics and Managerial Economics. It also contains links to articles about politics. The opinions here are mine. No one at VCU reviews or approves what I post.
Wednesday, March 17, 2021
What happens when a freeze shuts down plants that make chemicals?
The WSJ (March 2020) reports that disruptions in the supply chains have created shortages in raw materials used for chemical compounds and plastics and that prices for these products have increased. The report is a great example of what happens when supply decreases. Supply decrease => shortage at original equilibrium price => price increases to new equilibrium.
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