Producers of Walkmans will be able to lower the wage rate that they pay to their workers. Walkman Watch asks you to predict the effects on the supply of Walkmans, and the price of a Walkman. You predict that the supply curve shifts

Question

Quizplus · Accepted Answer

If producers are able to lower the wage rate they pay to workers, their cost of production decreases, allowing them to produce and supply more Walkmans at any given price. This will shift the supply curve rightward. As a result, the equilibrium price of Walkmans will fall as the quantity supplied increases.

Producers of Walkmans Will Be Able to Lower the Wage