The Motor Vehicle Builders' Union bargained for higher wages and more benefits for its members. As a result of the higher wages and increased benefits,
i. the quantity of new cars supplied decreases.
ii. the supply of new cars decreases.
iii. the supply of new cars increases.

Question

Quizplus · Accepted Answer

Higher wages and increased benefits for workers increase the production costs for car manufacturers. This leads to a leftward shift in the supply curve, indicating a decrease in the supply of new cars, not a change in the quantity supplied or an increase in supply.

The Motor Vehicle Builders' Union Bargained for Higher Wages and More