Question

using separate demand and supply diagrams explain the effect on the price and quantity of smartphones if the electronic worker's wages rises

Answer 1

_{In the market for smartphones, electronic workers are hired as labor units to produce smartphones. When their wages are increased, cost of production is increased. This reduces the production and hence, supply decreases. As a result, there is a leftward shift of the supply curve and at the new equilibrium, price is increased but quantity is reduced}

Effect of a decrease in the supply Price($) S'S Supply curve SS - - - - --- - - Demand curve DD QI QO Quantity