Answer:
Decrease in the supply of the commodity leads to an increase in the equilibrium price and a fall in the equilibrium quantity. Let us understand how it happens: \[{{D}_{1}}{{D}_{1}}\] and \[{{S}_{1}}{{S}_{1}}\] represents the marker demand and market supply respectively. The initial equilibrium occurs at \[{{E}_{1}},\] where the demand and the supply intersect each other. Due to the decrease in the supply of the commodity, the supply curve will shift leftward parallel from \[{{S}_{1}}{{S}_{1}}\] to \[{{S}_{2}}{{S}_{2}}\], while the demand curve will remain unchanged. Hence, at the original price \[({{P}_{1}}),\] there will be a situation of excess demand, equivalent to \[({{q}_{3}}-{{q}_{1}})\]. Consequently, the price will rise due to excess demand. The price will continue to rise until it reaches, \[{{E}_{2}}\] (new equilibrium), where \[{{D}_{1}}{{D}_{1}}\] intersects the supply curve\[{{S}_{2}}{{S}_{2}}\]. The equilibrium price rises from \[{{P}_{1}}\] to \[{{P}_{2}}\]and the equilibrium output falls from \[{{q}_{1}}\] to\[{{q}_{2}}\].
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