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This analyst estimates that 320 thousand players will be supplied

Economics Dec 12, 2020

This analyst estimates that 320 thousand players will be supplied. Note the price at this quantity if both the supply shifters remain equal to their initial values.

Now, assume there is a $10 increase in the hourly wage of workers.

According to this analyst, this increase in the wage for workers will shift the supply curve up by how much?

A. $20

B. $45

C. $10

D. $3

E. $30

Expert Solution

According to this analyst, this increase in the wage for workers will shift the supply curve up by how much C. $10 .

Since supply shifters get equal to their initial values implies the situation that is the other factors remain constant. Now an increase in the price will impact the increase in quantity supplied but its magnitude of change depends on the respective elasticity of supply. It is assumed that the elasticity of supply is the unity which would provide the situation which would reflect that the percentage change in the price would get equated with the percentage change in quantity supplied. Hence, a $10 increase in price would shift up the supply curve by $10.

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