Question

The graph shows the supply curve of lamps.

Draw a new supply curve that shows what happens in the market for lamps if the wage rate of workers who make lamps rises but all other influences on selling plans remain the same. Label the curve.

Use any prices and quantities you​ wish, but make your supply curve obey the law of supply.

Answer 1

When the wage rate of workers who make lamps rises, the supply curve for lamps will shift to the left, indicating a decrease in the quantity supplied at every price.

Step-by-step explanation:

To show what happens in the market for lamps if the wage rate of workers who make lamps rises, we need to draw a new supply curve. Since the wage rate is increasing, it means the cost of production is also increasing for lamp manufacturers.

As a result, they will be willing to supply fewer lamps at each price level. Therefore, the new supply curve will shift to the left, indicating a decrease in the quantity supplied at every price.