What is the equilibrium wage?
A) 1
B) 2
C) 3
D) 4
E) 5

Question

Quizplus · Accepted Answer

The equilibrium wage is where the supply and demand for labor intersect. In this question, the supply of labor is represented by the number of workers willing to work at a certain wage (7 at $3, 5 at $4, and 2 at $5), and the demand for labor is represented by the number of workers that employers are willing to hire at a certain wage (2 at $3, 8 at $4, and 4 at $5). The intersection occurs at a wage of $3. Therefore, the equilibrium wage is $3, or answer choice C.

What Is the Equilibrium Wage