Answer to Question #134575 in Economics for Yakir Magence

Question

Marcus provides math tutoring lessons to ICON students. The amount of hours he is willing to tutor (supply) (Q) depends on the price he charges (P) in the following way: Q= 3P+2. The demand for his tutoring services is given by Q=5-2P.

If the government stipulates that all tutors have to charge $15 per hour (and it is able to enforce this policy), then

Question 7 options:

a)the demand curve will shift to the left

b)the demand curve will shift to the right

c)none of the above

d)the supply curve will shift to the left

e)the supply curve will shift to the right

Answer 1

If the government stipulates that all tutors have to charge $15 per hour (and it is able to enforce this policy), then the supply curve will shift to the left, the equilibrium price will increase, and the equilibrium quantity will decrease.

So, the correct answer is d.