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The cost of labor increases. What happens to the price and quantity of cars? Use the Hill Method format to solve this, show all work
The cost of labor increases. What happens to the price and quantity of cars?
Use the Hill Method format to solve this, show all work and explanation please:
Step#1: Draw a Supply and Demand curve: Label all axis, Label equilibrium Price and Equilibrium Quantity Per Unit Price $10 $9 $8 $7 $6 Quantity Demand: 0 10 20 30 40 50 60 70 80 Step#2: List Determinants: Demand Determinants Supply Determinants Yn (income for a normal good) C (cost) Yi (income for a inferior good) Tech (Technology) Pc (Price of a complementary good) #S (Number of Sellers) Ps (Price of a substitute good) Ra (Resource Availability) #B (Number of Buyers) I (Tastes - Preference) EXPpy (Expectancy of change) Px (Price Special) Px (Price Special) Step#3: Read Problem, and Select Determinant the Changed with an "X" Step #4: Draw Formula to solve Problem: (always the same), then fill in the first three components (blanks). Change in Change in Change in Change in Price Change in Determinant Demand Supply [after line shift] Quantity [Determinant and [relationship and [relationship and [after line shift] change in line shift] lime shift] determinant]Remember, we have 6 possibilities of change Demand Demand Supply Supply Price is held above Price is held Increasea Decreasea Increases Decreasea equilibrium below equilibrium XX Price Price Step#5: Change supply and demand curve accordingly. Then fill in the last two components of formula. Per Unit Price $10 $9 $8 $7 $6 $5 $4 $3 Quantity Demand: 0 10 20 30 40 50 60 70 80 Change in Change in Change in Change in Price Change in Determinant Demand Supply [after line shift] Quantity [Determinant and [relationship and [relationship and [after line shift] change in line shift] line shift] determinant] Step #6: List the Conclusion: (what was the change in price and quantity) Step #7: Justify the determinant that changed: (why did you select your determinant)Step by Step Solution
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