The wages paid to grape harvesters increases. We would expect:

Question

Quizplus · Accepted Answer

If the wages of grape harvesters increase, it will increase the cost of production. As a result, the supply of wine will decrease, which will shift the supply curve to the left. This will lead to an increase in the equilibrium price of wine. However, consumers may also choose to reduce consumption due to the higher price, which will decrease the equilibrium quantity. Therefore, we can expect an increase in the equilibrium price of wine and a decrease in the equilibrium quantity of wine.

The Wages Paid to Grape Harvesters Increases