If workers who make DVDs get a pay raise, the equilibrium price of a DVD ________ and the equilibrium quantity of DVDs ________.

Question

Quizplus · Accepted Answer

When workers who make DVDs get a pay raise, the cost of producing DVDs increases. This typically leads to a decrease in supply, as it becomes more expensive to produce the same quantity of DVDs. With a decrease in supply and assuming demand remains constant, the equilibrium price of DVDs rises (as the supply curve shifts to the left), and the equilibrium quantity of DVDs decreases (as the new equilibrium point is at a lower quantity on the demand curve).

If Workers Who Make DVDs Get a Pay Raise, the Equilibrium