Hi, I have a dobt in this video. On 8:35, you drew another supply curve to show increase in the supply of cars, but, didn't make another demand curve. Is this because the scenario given does not affect the demand??
I have a question. On 8:35, why was price involved. Why did u have to show the equilibrium. Couldn't u just have done a shift to right in supply curve alone (without price)?
No because when your supply curve will shift, there will be a new price as well, because if cost of production becomes cheaper then not only will the supply increase but the market price of cars will also fall (because now they can price cars at a lower price while still keeping the same lvl of profits). So you will have to draw this change in your diagram as well.
