The figure given below shows the demand curve in the U.S. and the cost curves in U.S. and India.Figure: 16.4
In the figure:
MC: Marginal cost curve
ATC: Average total cost curve
D: Demand curve in the U.S.MR: Marginal revenue curve in the U.S.
-Why has there been an increase in the inequality of income?

Question

The figure given below shows the demand curve in the U.S. and the cost curves in U.S. and India.Figure: 16.4
  In the figure:
MC: Marginal cost curve
ATC: Average total cost curve
D: Demand curve in the U.S.MR: Marginal revenue curve in the U.S.
-Why has there been an increase in the inequality of income?

Quizplus · Accepted Answer

As shown in the figure, the demand curve (D) in the U.S. has shifted to the right due to an increase in demand for skilled workers, which has resulted in an increase in the marginal revenue curve (MR) as well. However, the cost curves (MC and ATC) have not shifted to the same extent, indicating that the demand for unskilled workers has not kept pace. This implies that the gap between the wages earned by skilled and unskilled workers has widened, leading to an increase in income inequality. Additionally, the other choices do not explain the observed pattern in the figure.

The Figure Given Below Shows the Demand Curve in the U.S