Answer to Question #230630 in Microeconomics for Jia

Question

There is a market of computer i.e there is some demand and supply of computer shown in the diagram the effect on the demand and supply curve, the equilibrium quantity if the salaries of electronic technician go up explain in Word also

Answer 1

An increase in the salaries of the technicians is an increase in the cost of production of computers hence it will cause a left shift of the supply curve from S1 to S2. The price of computers will increase from P1 to P2 leading to a reduction in the number of computers demanded in the market from Q1 to Q2. Consequently, the market equilibrium will also move from its original point to the new market equilibrium point.