The charges of fuel and power increases. Explain the effect on the supply of commodity X in whose production it is used.

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Fuel and power are both used as inputs for the production of Commodity X. For the explanation of its effect, kindly refer to the following link:


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An increase in price of fuel and power means an increase in the cost of production. To supply any given quantity of the commodity, the firm must be paid a higher price so as to cover the increase in costs, implying an upward shift in supply curve. Alternatively, at any given price, the firm will have an incentive to supply lesser quantity of the commodity due to fall in profit margin, implying a leftward shift in supply curve.
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