posted by Myke on .
If I have a business in producing books and the demand decrease at the same time there is a recession and I have more people willing to work. I'm assuming that my product will be less demanded and my supply will increase because more people are willing to work. Am I correct?
Thank you for using the Jiskha Homework Help Forum. You are correct in that you will have a greater supply of books but not because more people are willing to work. This is the rule of "supply and demand." If there is a large demand, your supply will dwindle. If there is no demand, your supply will remain the same, assuming you get no more books.
Because of the recession, less people are spending money on books. That is, because of the recession, at any given price, less books will be demanded -- the demand curve shifted inward.
Because fo the recession, more people are willing to work. So, you can pay your workers less. So, for any price, the amount of books you are willing to produce is greater because the price of labor is lower. Shift the supply curve outward.
You will unambigiously sell books at a lower price; the change in the number of books you sell is uncertain; could be higher could be lower.