Suppose the market for labor is perfectly competitive and the demand for labor is $L = 100 - 10 w$ and market supply is $L = - 20 + 10 w$ .The equilibrium number of workers hired will be
A)30
B)40
C)50
D)60

Question

Quizplus · Accepted Answer

To find the equilibrium number of workers hired, set the demand for labor equal to the supply of labor and solve for $L$. The demand for labor is $L = 100 - 10w$ and the supply is $L = -20 + 10w$. Setting them equal gives $100 - 10w = -20 + 10w$. Solving for $w$ gives $w = 6$. Substituting $w = 6$ back into either the demand or supply equation gives $L = 40$.

Suppose the Market for Labor Is Perfectly Competitive and the Demand