Question

Blacksmiths, who used to make and fit horseshoes on horses, hardly exist anymore. It seems many of them became auto mechanics. Tell a story of how demand and supply curves shifted during this change and how that might have affected prices and quantities of goods over time. There are several possible stories, just try to be complete.

Answer 1

Ans) A long time ago, when horses were in fashion for hunting and pulling chariots/carriers, there was high demand for blacksmiths and hence the price charged by blacksmiths was also good.

But with industrial revolution and cars hitting the roads, demand for horses and hence blacksmiths started decreasing, demand curve for blacksmiths shifted to the left and price dropped. Slowly, the demand dropped so low that being in business became unprofitable.

On the other hand, with increasing cars, demand for mechanics was increasing. Demand curve shifted to the right and price increased. Also, this reduced the supply of blacksmiths because auto mechanic industry was more lucrative.

So, now, many blacksmiths shifted their occupation and became mechanic, which was more profitable. And hence supply of mechanics also increased.

Therefore, today we hardly see any blacksmiths.