Question

What are the “welfare” (as discussed in Mankiw) implications involved with Apple’s behavior as a supplier/producer?

What are the “welfare” (as discussed in Mankiw) implications involved with Apple’s behavior as a supplier/producer?

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Answer #1

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Answer :

            The welfare (as discussed in Mankiw) implications involved with apple’s behaviour as a supplier / producer:-

  • Apple supplies or produces less than the market demand due to which prices increase lead to contraction in aggregate demand which reduces social welfare
  • If there is expansion in demand and apple supplies to fulfill the demand than it will increase social welfare.
  • If apple will supply less products according to the demand and will increase its profit than the social welfare will decrease. The more the profit earned by company will increase, social welfare will reduce.
  • High prices of Apple also reduces welfare.
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