Final answer:
If demand for a product is low, the price of the product will typically be lower, due to the law of demand. Factors such as environmental fines can cause a leftward shift in the supply curve, leading to a rise in the equilibrium price, while a lack of regulation might leave the supply curve unchanged.
Step-by-step explanation:
If there is a low demand for a product, the price for that product will typically be lower. This is because, according to the law of demand, a higher price leads to a lower quantity demanded, and conversely, a lower price leads to a higher quantity demanded. When a product has low demand, sellers may reduce its price to stimulate demand and clear excess stock.
In the context of shifts in the market supply curve due to external factors:
- Firms required to pay a fine for carbon emissions will likely see a leftward shift in the supply curve, as the fine increases costs.
- Companies sued for polluting a river will also likely experience a leftward shift in supply due to potential legal and cleanup costs.
- Power plants not required to address air quality emissions might not experience a shift, so the supply curve could stay the same.
- Companies required to clean up after fracking might see a leftward shift in the supply curve, as cleanup is an additional cost.
For each scenario where the supply curve shifts left, a decrease in supply, all else equal, would typically result in a rise in the equilibrium price. This is because a decrease in supply, with constant demand, leads to fewer goods available, which puts upward pressure on prices.
3) be lower is the correct option.