Answer to Question #230600 in Microeconomics for Hira

Question

There is a market of computer i.e. there is some demand and supply of computer. Shown in a diagram the effect on the demand and supply curve, the equilibrium price and the equilibrium quantity if “THE SALARIES OF ELECTRONIC TECHNICIAN GO UP”. (Explain also in words).

Answer 1

This will shift the supply down so that quantity will fall and the price will rise. This is because the cost is more and so for the same price less is supplied. This is similar to cost shock which pushes the supply curve.