Indicate whether the following scenarios represent an increase, decrease, or no change in the long-run aggregate supply (LRAS) curve. Each label may be used more than once.
A. The mandatory retirement age in Wonkaland is abolished.
B. Wonkaland?s main export is candy. Candy from this country increases in popularity as consumers all over the world want to buy Wonkalandian candy.
C. Since candy from Wonkaland has become an international sensation, factories in Wonkaland double the number of candy making machines.
D. The top candy companies in Wonkaland chose to relocate their means of production to other countries around the world.

A. increase

B. decrease

C. no change

D. no change

Explanation:

The long-run aggregate supply (LRAS) curve is the curve used to show how aggregate supply varies with changes in demand in the long run.

Let me explain each of the choices one after the other;

A. The mandatory retirement age in Wonkaland is abolished; this leads to an increase in long run supply because more people will be in the workforce, and more workers mean more production and more supply.

B. Wonkaland's main export is candy. Candy from this country increases in popularity as consumers all over the world want to buy Wonkalandian candy;  an increase in demand from all over the world will cause number of supply to drop long term, because, lesser number of products will be distributed among a larger number of people.

C. Since candy from Wonkaland has become an international sensation, factories in Wonkaland double the number of candy making machines; initially as described in B above, the supply decreases, but if number of candy making machines are doubled, the supply that has decrease begins to rise again until it reaches its original point, hence causing no chance in the LRAS, because it s assumed that the new machines are used to satisfy the external demand.

D.The top candy companies in Wonkaland chose to relocate their means of production to other countries around the world; in the case of relocation, there will be no change in overall supply because the change is only in location and not in production capabilities, but locally, the supply might decrease in the place where they relocated from.

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