Answer :
The intersection of supply and demand curves would cause a decrease in the equilibrium price and quantity of fertilizers.
Natural gas is a key input of fertilizer. Ceteris paribus, an increase in the price of natural gas will decrease the equilibrium price of fertilizer and decrease the equilibrium quantity of fertilizer. European Manufacturers are facing the impact of the Russian gas shutoff.
There is an article on WSJ on this subject titled "European Manufacturers Reel From Russian Gas Shutoff". According to the supply-demand model, an increase in the price of natural gas will decrease the equilibrium price of fertilizer and decrease the equilibrium quantity of fertilizer.
The demand and supply curve show the market price and quantity. The demand curve shows the relationship between the price and the quantity of fertilizer demanded by the customers. The supply curve shows the relationship between the price and the quantity of fertilizer supplied by the suppliers.
The increase in natural gas prices increases the production cost of the fertilizer. Therefore, suppliers would offer less quantity of fertilizers at higher prices. The supply curve would shift to the left, while the demand curve remains constant. The intersection of supply and demand curves would cause a decrease in the equilibrium price and quantity of fertilizers.
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