The United Auto Workers bargained for higher wages and more benefits for autoworkers. As a result of the higher wages and increased benefits, i. the quantity of new automobiles supplied decreases.
Ii. the supply of new automobiles decreases.
Iii. the supply of new automobiles increases.

Question

Quizplus · Accepted Answer

The bargaining for higher wages and more benefits for autoworkers would increase the cost of production for the automobile companies. This, in turn, would lead to a decrease in the supply of new automobiles as the higher cost of production would make it less profitable for the companies to produce and sell the same quantity of automobiles as before. Therefore, only statement ii - the supply of new automobiles decreases - is correct.

The United Auto Workers Bargained for Higher Wages and More