Producers of tablet computers will be able to lower the wage rate that they pay to their workers. You are asked to predict the effects on the supply of tablet computers, and the price of a tablet computer. You predict that the supply curve shifts

Question

Quizplus · Accepted Answer

Lowering the wage rate decreases production costs, allowing producers to supply more at each price point, shifting the supply curve rightward. Increased supply, with demand constant, leads to a lower equilibrium price.

Producers of Tablet Computers Will Be Able to Lower the Wage