The wage rate paid by Walkman producers falls and at the same time the price of raw materials used in the production of Walkmans rises. You predict that the supply curve of Walkmans will

Question

Quizplus · Accepted Answer

The wage rate paid by Walkman producers falling would lead to a decrease in production costs, which would shift the supply curve rightward. However, the rise in the price of raw materials used in the production of Walkmans would increase the production costs, which would shift the supply curve leftward. Therefore, the supply curve of Walkmans will shift either leftward or rightward depending on the magnitude of the changes in the wage rate and raw material prices.

The Wage Rate Paid by Walkman Producers Falls and at the Same