Author Question: Technological advances in recycling make it possible to produce a greater quantity of paper from a ... (Read 67 times)

anjilletteb · **on:** Jun 30, 2018

Technological advances in recycling make it possible to produce a greater quantity of paper from a given quantity of recycled newspapers. Predict the likely impact on the supply curve for paper.
a. There is a movement down along the supply curve.
b. There is a movement up along the supply curve.
c. The supply curve shifts to the left.
d. The supply curve shifts to the right.

Question 2

How will firms react to rising output price levels? What reactions can they expect from their employees and suppliers over time?

SAUXC · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

d

Answer to Question 2

Firms have an incentive to increase real output if the price of the goods they are selling is rising faster than the cost of their inputs. Suppliers and workers will begin to experience diminished purchasing power. As a result of this diminished purchasing power they will begin to adjust their demands for higher wages and higher prices for inputs.