Figure 18-7
-Refer to Figure 18-7.If the relevant labor supply curve is S₂ and the current wage is W₁,

Question

Figure 18-7 -Refer to Figure 18-7.If the relevant labor supply curve is S₂ and the current wage is W₁,

Quizplus · Accepted Answer

At the current wage, there is a surplus of labor because the quantity of labor supplied (U1B12) exceeds the quantity of labor demanded (U1B11). To restore equilibrium, firms may need to lower the wage or find ways to increase the demand for labor. An increase in the minimum wage would likely exacerbate the surplus of labor.

Figure 18-7 -Refer to Figure 18-7.If the Relevant Labor Supply Curve Is