Question

Explain why an increase in wages is likely to increase demand but may reduce supply..... plz :)) i have a cz tomorrow aND I nEeD HeLp

Answer 1

Answer:

see below

Explanation:

An increase in wages increases the amount of disposable income for individuals. It means that households will have more money to spend. An increase in wages results in increases in the people's ability to buy, which increases the demand for goods and services.

Wagers are an expense to suppliers. An increase in wages will increase the cost of production. When production cost increases, suppliers' profit margin decreases. Since supplies are motivated by profits, a decrease in profit margins may result in reduced production.