What would happen to the equilibrium price and quantity of apples if the wages of apple pickers rose and the price of peaches rose?

Question

Quizplus · Accepted Answer

When the wages of apple pickers rise, the cost of producing apples increases, leading to a decrease in supply. This would typically increase the price of apples. If the price of peaches (a substitute for apples) also rises, the demand for apples would increase, further pushing up the price. The overall effect on quantity is ambiguous because the decrease in supply and increase in demand have opposing effects on quantity.

What Would Happen to the Equilibrium Price and Quantity of Apples