Refer to the figure below: Let demand remain constant at D ; an increase in wage
ID: 1132962 • Letter: R
Question
Refer to the figure below:
Let demand remain constant at D; an increase in wages causes firms to be willing and able to sell 150 fewer units at each price than they were before the wage increase.
The new equilibrium price and quantity will be P = $6 and Q = 150.
The new equilibrium price and quantity will be P = $6 and Q = 400.
The new equilibrium price and quantity will be P = $7 and Q = 250.
The new equilibrium price and quantity will be P = $8 and Q = 300.
10t 8 6 4 0 100 200 300 400 500 600 700 QuantityExplanation / Answer
The initial equilibrium is at price $6 and quantity 300. If there is an increase in wages then the supply curve would shift to the left and quantity supplied would fall by 150 .i.e. 300-150= 150units and price will remain at $6.
the correct option is A