Question

a firm can either use their own employees to keep the office clean or hire a...

a firm can either use their own employees to keep the office clean or hire a cleaning s service to do it. Assume an increase in the minimum wage increases the hourly wage cleaning services must pay their employees. What is the predicted effect of this on the price and quantity of cleaning service market? the market is perfectly competitive

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Perfect competition is the form of the market where there are many buyer and seller who is selling goods and service and in this form of the market, the price of goods and services determine by market forces of demand and supply or determine by industry.

As in the question, it is talking about Firm Not The Firms. Firm means individual unit and Firms means Group of the individual unit that is Industry.

So, Individual firm increases the minimum wages of the person who is working infirm it does not have any effect on the industry and the whole market but it will affect the price and quantity of individual firm. As minimum wage increases which leads increase in the Cost of Production and it affects the supply curve and Supply curve shift leftward and Price Increases and Quantity decreases.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
For all parts of this question you are analyzing the market for Comcast Cable Service in...
For all parts of this question you are analyzing the market for Comcast Cable Service in your city. Match the descriptions below with whether they would increase or decrease supply or demand. Increase in Supply? Decrease in Quantity Demanded? Decrease in Quantity Supplied? Increase in Demand? Decrease in Supply? Increase in Quantity Supplied? Increase in Quantity Demanded? Decrease in Demand? 1. The price of Comcast cable service decreases. 2. The minimum wage increases; Comcast must pay its employees a higher...
1. For a perfectly competitive firm in the short run, the ____________ price is at minimum...
1. For a perfectly competitive firm in the short run, the ____________ price is at minimum average variable cost and the break-even price is at minimum ________ cost.    a. Shut-down: Marginal b. Shut-down: Average c. Operating: Average d. Operating: Marginal 2. The short-run supply curve for a perfectly competitive firm is a _______ line at zero quantity if the price is below minimum average variable cost but is the marginal cost if the price is at or above minimum...
QUESTION 10 If unskilled labor and capital are substitutes, the price of unskilled labor decreases when...
QUESTION 10 If unskilled labor and capital are substitutes, the price of unskilled labor decreases when the price of capital increases. the cross-elasticity between unskilled labor and capital is positive. the price of capital is increasing. demand for unskilled labor increases when the price of capital decreases. QUESTION 11 The imposition of a minimum wage on a competitive labor market will likely create unemployment as some people enter the labor market while some firms reduce the quantity of labor they...
g 1) Farmers can plant either corn or soybeans in their fields. Which of the following...
g 1) Farmers can plant either corn or soybeans in their fields. Which of the following would cause the supply of soybeans to increase? A) an increase in the price of soybeans B) a decrease in the price of corn C) an increase in the demand for corn D) an increase in the price of soybean seeds E) an increase in the price of tomatoes 2) For a perfectly competitive firm, which of the following is not trueat profit maximization?...
1. Which is statement is true? I. A single-price monopolist charges a price equal to the...
1. Which is statement is true? I. A single-price monopolist charges a price equal to the marginal cost of the last unit sold. II. A monopolist with positive marginal costs and facing a linear demand curve always sets a quantity (or price) such that it sells on the elastic section of the demand curve. III. A monopolist regulated by marginal-cost pricing regulation sells at a price that covers its variable and fixed costs of production, but it still causes a...
1. Compared with a perfectively competitive market a monopoly is inefficient because                    a. it raises...
1. Compared with a perfectively competitive market a monopoly is inefficient because                    a. it raises the market price above marginal cost and produces a smaller output.             b. it produces a greater output but charges a lower price.             c. it produces the same quantity while charging a higher price.             d. all surplus goes to the producer.             e. it leads to a smaller producer surplus but greater consumer surplus. 2. The demand curve of a monopolist typically...
1. Which is the most accurate definition of the study of economics? [1] Distributing surplus goods...
1. Which is the most accurate definition of the study of economics? [1] Distributing surplus goods to those in need. [2] Dealing with affluence in a morally bankrupt world. [3] Using scarce resources to satisfy unlimited human wants. [4] Reducing human wants to eliminate the problem of scarcity. 2. Computer software represents [1] labour. [2] land. [3] capital. [4] entrepreneurship. 3. Suppose you have graduated with a degree in accounting and are offered a job with an accounting firm. But...
Please Check the wrong ones! 1. Which of the following best describes scarce resources? a. Resources...
Please Check the wrong ones! 1. Which of the following best describes scarce resources? a. Resources for which the quantity that people want exceeds the quantity that is freely available b. Resources that most people cannot afford to buy c. Resources for which the quantity demanded is the same for all economic agents d. Resources that can only be distributed efficiently by the government 2. Which of the following statements is true of models? a. It is more important for...
practice quiz 1. A legal maximum price at which a good can be sold is a...
practice quiz 1. A legal maximum price at which a good can be sold is a price a. floor b. stabilization c. support d. ceiling 2. A price floor is not binding if a. the price floor is higher than the equilibrium market price b. the price floor is lower than the equilibrium market price c. people are willing to buy less when the price floor is imposed as they did before d. the government sets it 3. Rationing by...
Wage Gains Threaten to Squeeze Retail, Industrial Profits - Higher labor costs pose risk to some...
Wage Gains Threaten to Squeeze Retail, Industrial Profits - Higher labor costs pose risk to some U.S. companies already facing trade-related tensions, limited pricing power Summary: The U.S. job market and its low unemployment rate are forcing companies to rise the wages of its employees and potential employees. According to the U.S. department of labor, wages are up about 2.7% from a year ago. The growth in hourly wages holds both good news (for workers) and bad news (for shareholders)....
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT