You are the manager of GemStone, a company which produces sparkling water. You obtain information that there has been a disruption in the global supply chain of aluminum, an input for your product, causing a shortage. Additionally you learn that there has been a shock to the economy which will result in large layoffs and increasing unemployment. Knowing that your product is a normal good, and assuming that the market for sparkling water is perfectly competitive and currently in equilibrium, what can you infer?Equilibrium quantity will increase for sure.Equilibrium price will increase for sure.Equilibrium quantity will decrease for sure.Equilibrium price will decrease for sure.
