Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Supply decreases and demand increases
B
Supply increases and demand decreases
C
Both supply and demand increase
D
Both supply and demand decrease
Understanding the Answer
Let's break down why this is correct
Answer
If wages for peach farm workers increase, it may lead to higher production costs for peach farmers. When it costs more to grow peaches, farmers might produce fewer peaches because they want to keep their profits stable. At the same time, if studies show that peaches have health benefits, more people may want to buy them, increasing demand. This combination of lower supply and higher demand could lead to higher prices for peaches in the market. For example, if a farmer used to sell peaches for $1 each but now needs to raise the price to $1.
Detailed Explanation
When workers earn more, they can produce fewer peaches because it costs more to hire them. Other options are incorrect because This option suggests that more peaches will be made, but higher wages can make it harder to produce them; This choice says both supply and demand will go up.
Key Concepts
Supply and Demand Analysis
Market Equilibrium
Price Elasticity
Topic
Supply and Demand Analysis
Difficulty
medium level question
Cognitive Level
understand
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