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S1 S2 S3 elett D2 Assume initially the market in the figure above is at the equilibrium point E. If the price of a compliment

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New equilibrium point is at: A

An increase in the price of the compliment good increases the price of the good in consideration. Whereas an increase in the price of an input used in production leads to an increase in the costs of production and makes it more expensive. It thus reduces the supply of the good. Thus the demand and the supply schedule will both shift leftward and the new equilibrium would be at point A.

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