Exhibit 12-6
-If the market represented in Exhibit 12-6 is allowed to operate freely, total employment in the market will be

Question

Exhibit 12-6 
-If the market represented in Exhibit 12-6 is allowed to operate freely, total employment in the market will be

Quizplus · Accepted Answer

The market will operate at the point where the supply curve intersects the demand curve, which is at a wage rate of $12 per hour and a quantity of 60 units. At this point, each firm will hire 12 workers for a total of 12 firms x 12 workers = 144 workers. Since there are 5 identical firms in the market, the total employment in the market will be 5 x 144 = 720 workers. Therefore, the correct answer is D.

Exhibit 12-6 -If the Market Represented in Exhibit 12-6 Is Allowed to Is