Fig 1. Demand and supply equilibrium associated with reduced milk production following an outbreak of Johne’s.

In Fig 1, the intersection of supply curves, $S_T^0$, $S_U^0$, and $S_I^0$, and demand curve, $D_T^0$, determine the initial equilibrium market price, P⁰, and quantity supplied by the market, $Q_T^0$, the infected producers, $Q_I^0$, and uninfected producers, $Q_U^0$. A decrease in milk production associated with the introduction of Johne’s shifts the infected producer supply curve backward to $S_I^1$, the equilibrium quantity supplied by infected producers will decrease, from $Q_I^0$ to $Q_I^1$, and the price increases, from P⁰ to P¹. Uninfected producers will increase their supply from, $Q_U^0$ to $Q_U^1$, in response to a price increase (i.e. a movement along their supply curve). Overall, the total market supply, Q_{T =} Q_U + Q_I, will decrease, from $Q_T^0$ to $Q_T^1$, because $\left|Q_I^0-Q_I^1\right|>\left|Q_U^0-Q_U^1\right|$.