Draw the graph · Micro · Supply and demand
Higher wages at restaurants
Drag a curve sideways, or use its arrows. A curve you do not move is a curve you are saying stays put. Make each shift clear enough that a reader could see it.
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Demand stays put. Supply shifts left.
Wages are a cost of production, a supply-side factor. Each meal now costs more to serve, so restaurants offer fewer meals at every price. Supply shifts left. Demand is unchanged. The higher price moves diners up along their demand curve.
Price rises and quantity falls.
Common mistake. Some students shift demand right, reasoning that workers earning more will eat out more. The stem says diners' incomes are unchanged. The direct effect is on restaurant costs, and that is supply.
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Lesson: The Supply Curve