-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

Quizplus · Accepted Answer

A decrease in the wages paid to workers would likely decrease the cost of production for firms. This could lead to an increase in supply, shifting the supply curve to the right. As a result, the equilibrium price would decrease, and the equilibrium quantity would increase, which matches the description of choice C ($75 and 75,000).

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