Phil's Copy Studio Pays Its Workers $60 Per Day and Sells

question 72

Multiple Choice

Phil's Copy Studio pays its workers $60 per day and sells poster-size copies for $10 per print.Now suppose during the holiday season the price of poster-size copies increases to $12.What happens to the labor demand during the holiday season?

• A)The demand for labor increases.
• B)The demand for labor decreases.
• C)The quantity demanded of labor increases, but the demand for labor curve does not shift.
• D)The quantity demanded of labor decreases, but the demand for labor curve does not shift.

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Definitions:

Deadweight Loss

The decrease in economic productivity that happens when a good or service does not reach, or cannot reach, its equilibrium point.

Consumer Surplus

The difference between the maximum amount consumers are willing to pay for a good or service and the actual amount they do pay.

Tax Revenue

The wealth accumulated by governments through the process of taxation.

Consumer Surplus

Consumer surplus is the difference between the total amount consumers are willing and able to pay for a good or service and the total amount they actually pay.