The table at the end of this problem gives hypothetical data for the quantity of electric scooters demanded and supplied per month.a. Graph the demand and supply curves.b. Find the equilibrium price and quantity.c. Illustrate on your graph how an increase in the wage rate paid to scooter assemblers would affect the market for electric scooters.d. What would happen if there was an increase in the wage rate paid to scooter assemblers at the same time that tastes for electric scooters increased?Price perQuantityQuantityElectric ScooterDemandedSupplied$150500250$175475350$200450450$225425550$250400650$275375750
a) According to the data given in the table the following graph shows the demand curve (blue) and supply curve (red). b) At equilibrium, quantity demanded = quantity supplied From table, we see that equilibrium quantity is 450 and equilibrium price corresponding to equilibrium quantityis $200. c) An increase in wage rate paid to scooter assemblers would increase the input cost of the electric scooter suppliers, thereby decreasing the overall supply in the market and shifting supply curve leftwards to SS’. This would decrease the equilibrium quantity and increase the equilibrium price….
d) If there was an increase in the wage rate paid to scooter assemblers at the same time that tastes for electric scooters increased then apart from decrease in supply (as illustrated in part c) there would be a upward shift in demand curve to DD’ in response to the increased tastes for electric scooters. In comparison to the case in part c, the equilibrium quantity and price would increase.