The table gives a labor demand schedule and a labor supply schedule If an increase in the adult...


The table gives a labor demand schedule and a labor supply schedule

Wage rate (dollars per hour) Quantity of labor supplied Quantity of labor Demanded
(number of workers)
5 400 800
10 500 700
15 600 600
20 700 500
25 800 400

If an increase in the adult population changes the quantity of labor supplied by 200 workers at each wage rate, what is the new equilibrium wage rate?

The new equilibrium wage rate is $_____ an hour

Equilibrium wage:

Equilibrium wage is attained at a point where the demand for labour equals the supply of labour. It is called equilibrium because there is no tendency for the wage rate to change unless there is some external disturbance.

Answer and Explanation: 1

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Initially, the labour demand equals the labour supply at a wage rate of $15.

But when the supply of workers increased due to increase in adult...

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The Labor Market in Economics


Chapter 8 / Lesson 4

In economics, labor is subject to the laws of supply and demand. Learn about the labor market in economics. Explore scarcity in labor, review why CEOs make more money than teachers, and examine the impact of market forces on the labor market.

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