Figure 3-7

-Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for women's clothing.Which panel best describes what happens in this market when the wages of seamstresses rise?
A)Panel (a)
B)Panel (b)
C)Panel (c)
D)Panel (d)

Question

Figure 3-7
 
-Refer to Figure 3-7.Assume that the graphs in this figure represent the demand and supply curves for women's clothing.Which panel best describes what happens in this market when the wages of seamstresses rise?
A)Panel (a) 
B)Panel (b) 
C)Panel (c) 
D)Panel (d)

Quizplus · Accepted Answer

Panel (b) shows a decrease in the quantity supplied and an increase in the equilibrium price, which is what would happen in a market for women's clothing if the wages of seamstresses (who produce the garments) were to rise. This would lead to a higher cost of production, resulting in a decrease in supply and a higher price to maintain equilibrium.

Figure 3-7 -Refer to Figure 3-7.Assume That the Graphs in This Figure