Suppose a union successfully negotiates an increase in the wages of workers producing computer chips. This...

Suppose a union successfully negotiates an increase in the wages of workers producing computer chips. This would lead to (a decrease, an increase???) in the supply of computers, causing the price of computers to (rise, fall???) . Because computers and computer software are (substitutes, complements???) , this change in price would cause the demand for computer software to (increase, decrease???) . However, computers and typewriters are (substitutes, complements???) , so the change in the price of computers would (decrease, increase???) the demand for typewriters.

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Expert Solution

Suppose a union successfully negotiates an increase in the wages of workers producing computers chips. This would lead to a decrease, in the supply of computers using the price of the computers to rise.Because computers and computers software are compliments, this change in price would cause the demand for computers software decreases.However, computers and typewriters are a substitute, so the change in the price of computers would increase the demand for typewriters.

increasing the wages leads to increasing the cost of the production supply will reduce
Lower supply od demand results increasing the price of the computers
Computers and Softwares complimentary goods without Softwares computer has no use then demand computers decrease due to increasing the price of the software
Typewriters and computers substitute the work can be done through typewriters hence the demand for typewriter increase.

Rahul Sunny answered 1 year ago

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