Answer:
a wage at which the number of people willing to work equals the number of workers firms are willing to hire
Explanation:
Labor market equilibrium is where the demand curve for labour interests the supply curve for labour. At this point, the wage rate is the wage at which the number of people willing to work equals the number of workers firms are willing to hire
Please check the attached image for a graph depicting equilibrium in the labour market
In order to find current return on equity we need to find equity , In order to find equity we may use the below logic.
Since 39% of the assets are financed by Debt, we can conclude that the remaining 61% of total assets are financed by equity. Thus, of $410000, 61% constitutes Equity, Which is $250100.
In order the find Return on Equity we may used the below formula:
Return on Equity=
Return on Equity=*100
Return on equity= 11.30%
In cash assets are reduced to $252500, and the firm expects to keep the same capital structure of 39:61, Amount of Debt will be $98475 and Equity will be $154025
Thus New Return on Equity will Be= $28250/$154025*100
Return on Equity=18.34%
Thus return on equity increases by 7% (Approximately).