Question

A company decides to outsource its production of shoés to another country. There they find that workers are hired for much less. What should we expect from this change in the market for shoes ?

A. A decrease in the supply of shoes
B. A decrease in the quantity of shoes only
C. An increase in the supply of shoes
D. An increase in the quantity of shoes only

Answer 1

Outsourcing the production of shoes to a country with cheaper labor leads to an increase in the supply of shoes.

Step-by-step explanation:

When a company decides to outsource the production of shoes to another country where workers are hired for much less, we should expect an increase in the supply of shoes. This is because outsourcing allows the company to access cheaper labor, reducing their production costs. With lower production costs, the company can offer more shoes in the market at a lower price, resulting in an increase in the supply of shoes.