Question

Suppose that the quantity of labor demanded decreases by​ 80,000 at each wage level. What are the new free market equilibrium hourly wage and the new equilibrium quantity of​ labor?

Answer 1

Answer:

D) wage = $8.50 and quantity = 550,000

Explanation:

hourly wage      labor supplied     labor demanded      -80,000

$7.50                530,000            650,000          570,000

$8.50               550,000            630,000          550,000

$9.50                570,000             610,000          530,000

$10.50                590,000            590,000          510,000

$11.50                 610,000            570,000          490,000

$12.50                630,000            550,000          470,000

The equilibrium quantity is the point where the labor supplied and the labor demanded intersect, and in this case that point is located at 550,000 units of labor at a price (wage) of $8.50 per labor hour.