Answer to Question #99852 in Microeconomics for Diamond Smith

Question

If the legislation does succeed, what will happen to the market for landscape workers? Would it be best to represent the effect of the law in terms of a shift in the demand curve, a shift in the supply curve, or a combination of the two?

Answer 1

The Effect of Legislation in Terms of Shift and Demand Curves

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The Effect of Legislation in Terms of Shift and Demand Curves

Introduction

            In the recent years measures were created to preserve the laws and boost fair trade, and therefore legislation was made to guide the progress of the business. Legislation is the standard measure to assure that the terms, procedures, and conditions to be followed and agreed by the team involved in business are adhered to, this will help create a healthy and fair competition in the market. Therefore it would be the best to represent the effect of law in terms of a shift in the demand and supply curve.

           To begin, legislation creates competition among workers in the market place, this competition leads to the reduction in the cost of commodities, higher quality products and wider variety of the commodities (Lyson et al., 1939). In this case the demand will increase following reduced prices as the supply will reduce therefore increasing both demand and supply causing a shift in both demand and supply curves.

           Secondly, legislation gives customer protection in such a way that it ensures the business act justly towards their customers since customers occasionally are in a feeble financial state. In this case the demand increases and the supply reduces. Therefore it causes a shift in the demand curve (Brunot,2003).

           In conclusion, it’s the duty of all people to adhere to these standards in the nation to ensure a healthy and a fair business protecting both the consumers and the suppliers.

References

Brunot Trudy,(2003). Federal trade communication, Bureau of consumer protection

Lyson, L.S., Watkins, M. W., and Abramson, V. (1989). Government and economic life,Washington.