Question

mework Supply and Demand: Theory (Ch 03) 5. A change in supply versus a change in quantity supplied The following calculator shows the supply curve for sedans in an imaginary market. For simplicity, assume that all sedans are identical and sell for the same price. Two factors that affect the supply of sedans are the level of tecnical knowledge-in this case, the speed with which manufacturing robots can fasten bolts, or robot speed and the wage rate that auto manufacturers must pay their employees. Initially, the graph shows the supply curve when robots can fasten 2,500 bolts per hour and autoworkers can 25 per hour Use the graph input tool to help you answer the following questions. You will not be ded on any changes you make to this graph, Note: Once you enter a value in a white field, the graph and any corresponding out in each prefeld will change according Graph Input Tool Supply for Sedans Pica Sedan Quantity Supplied Secare part SUPPLY SHIFTERS PRICE (Thousands of dollars 2500 Robot Speed Bo per hour) worker Wage INITY (dend per month .000 Consider the previous the price of a sedan increases from 125.000 dans to which is reflected on the graph by lded for com the a decrease in the speed with which robots can attaches to can-there is curve because the technical dedi c a Following techno

Answer 1

Suppose that the price of a sedan increases from $26000 to $31000. This would cause the supply of the sedans to increase, which if reflected on the graph by a rightward movement along the supply curve.

Following a technological decline-for example, a decrease in the speed with which robots can attach bolts to cars- there is a leftward movement along the supply curve because the technological decline makers car more expensive.