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Supply curve for sedans in an imaginary market
Course:- Business Economics
Reference No.:- EM13889142




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The following calculator shows the supply curve for sedans in an imaginary market. For simplicity, assume that all sedans are identical and sell for the same price. Two factors that affect the supply of sedans are the level of technical knowledge- in this case, the speed with which auto-manufacturing robots can fasten bolts, or 'robot speed'-and the wage rate that auto manufacturers must pay their employees. Initially, the graph shows the supply curve when robots can faster 1500 bolts per hour and autoworkers earn $30 per hour.

Consider the previous graph. Suppose that the price of a sedan decreases from $ 26000 to $ 21,000 this would cause the (quantity supplied, or supply) of sedans to increase, which is reflected on the graph by a (shift of or movement along) the supply curve.

Suppose the workers union accepts a pay cut from $ 30 per hour to $ 25 per hour. Assuming that the robot speed remains the same, This causes a (rightward shift of, leftward movement along, rightward movement along, leftward shift of( the supply curve. This is because the pay cut makes cars (more fashionable, safer, less expensive to build, more expensive to build)?




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