Graph 18-2
-Refer to Graph 18-2.If the price of apples falls, which of the following will happen?
(i) the equilibrium quantity of labour will exceed L₁
(ii) the equilibrium wage paid to apple pickers will exceed W₁
(iii) the demand curve will shift down

Question

Graph 18-2 Graph 18-2 -Refer to Graph 18-2.If the price of apples falls, which of the following will happen? (i) the equilibrium quantity of labour will exceed L<sub>1</sub> (ii) the equilibrium wage paid to apple pickers will exceed W<sub>1</sub> (iii) the demand curve will shift down A) (i) and (ii) B) (i) and (iii) C) (ii) only D) (iii) only

Graph 18-2 -Refer to Graph 18-2.If the price of apples falls, which of the following will happen? (i) the equilibrium quantity of labour will exceed L<sub>1</sub> (ii) the equilibrium wage paid to apple pickers will exceed W<sub>1</sub> (iii) the demand curve will shift down A) (i) and (ii) B) (i) and (iii) C) (ii) only D) (iii) only

-Refer to Graph 18-2.If the price of apples falls, which of the following will happen?
(i) the equilibrium quantity of labour will exceed L₁
(ii) the equilibrium wage paid to apple pickers will exceed W₁
(iii) the demand curve will shift down

Quizplus · Accepted Answer

A fall in the price of apples would decrease the demand for apple pickers and lead to a movement along the labor supply curve. This would result in a lower equilibrium wage and quantity of labor as indicated by the intersection of the new demand and supply curves, which represents a point below the initial equilibrium (S1U1B0). Therefore, only option (iii) is correct. Option (i) is incorrect because the new equilibrium quantity of labor is lower than the initial equilibrium, and option (ii) is incorrect because the new equilibrium wage is lower than the initial equilibrium.

Graph 18-2 -Refer to Graph 18-2.If the Price of Apples Falls, Which