121k views
4 votes
What is the effect on market when suppliers under invest in their businesses​

User Donald Wu
by
3.9k points

1 Answer

3 votes

Answer:

  • Low supply
  • Scarcity
  • Low economic growth

Step-by-step explanation:

When suppliers under invest in their business, they will end up having the capacity to only produce less than the market requires. Should this happen, supply will be reduced in the market which would lead to relative scarcity all else being equal.

For economic growth to happen, there must be increasing production in an economy so if suppliers are under investing and production is low, there might be low or no economic growth.

User Pavel Ryvintsev
by
4.6k points