If the workers of a firm successfully negotiate an increase in wages,which of the following is most likely to happen?
A) The demand curve for the product the firm produces shifts rightward.
B) The demand curve for the product the firm produces shifts leftward.
C) The supply curve of the product the firm produces shifts rightward.
D) The supply curve of the product the firm produces shifts leftward.

Question

Quizplus · Accepted Answer

An increase in wages raises the production costs for the firm. This typically makes it more expensive for the firm to produce the same quantity of goods, leading to a decrease in the supply of the product. As a result, the supply curve shifts leftward, indicating a decrease in supply at each price level.

If the Workers of a Firm Successfully Negotiate an Increase