If the automobile workers' union successfully negotiates a wage increase for its members,how does the wage hike affect the supply of automobiles?
A) The supply increases.
B) The supply decreases.
C) The quantity supplied increases.
D) The quantity supplied decreases.
E) Both answers B and D are correct.

Question

Quizplus · Accepted Answer

A wage increase for automobile workers would increase the cost of production for cars, leading to a decrease in supply. Therefore, the correct choice is B - the supply decreases.

If the Automobile Workers' Union Successfully Negotiates a Wage Increase