-In Figure 3-11,suppose that initially the market is in equilibrium as defined by the demand and supply curves D₁ and S₁.Which price/quantity combination could result from a decrease in the wages paid to workers?
A) $100 and 50,000
B) $120 and 50,000
C) $75 and 75,000
D) $120 and 75,000
E) $120 and 100,000

Question

-In Figure 3-11,suppose that initially the market is in equilibrium as defined by the demand and supply curves D₁ and S₁.Which price/quantity combination could result from a decrease in the wages paid to workers?
A) $100 and 50,000 
B) $120 and 50,000 
C) $75 and 75,000 
D) $120 and 75,000 
E) $120 and 100,000

Quizplus · Accepted Answer

A decrease in wages reduces production costs, shifting the supply curve to the right, leading to a lower price and higher quantity.

-In Figure 3-11,suppose That Initially the Market Is in Equilibrium