Given the supply curve for radiographs by a radiology practice, predict how this

Question

Given the supply curve for radiographs by a radiology practice, predict how this curve will shift (supply will increase or decrease) if the following occur:

a. An increase in the wages of radiological technicians

b. A reduction in productivity

c. A decrease int eh wages of technicians

d. An increase in theh price of radiographs

e. An increase in the quality of services (radiologists spend more care in reading and interpreting radiographs)

f. An increase int he price of film

g. An increase int he number of patients with multiple and rare problems

Please explain the concept involved in solving the above problems.

Thank you.

Explanation / Answer

An increase in the wages increases the production cost and decrease the supply as there is less production.

Productivity means the efficiency of a worker/labor. If the efficiency decreases the production decreases leading to a decrease in the supply.

A decrease in the wages of technicians means the labor is now cheap and a firm can hire more and more workers to increase their overall production and this will increase the supply.

An increase in the price will lead to an increase in the supply as a firm would want to produce and supply more on higher prices to earn higher profits.

An crease in the quality of services will increase the demand and eventually lead to an increase in the supply in the long run.

Film is a substitute product for radiographs. Hence, an increase in the price of film will lead to an increase in the demand for radiographs as people will now buy more radiograph as it is cheaper. To cater to the increasing demand the supply will also increase.

An increase in the number of patients mean there has been an increase in demand. Hence, the supply will increase gradually.

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