A major computer software company maintains a technical support center in a rural area and is the only employer in this region. Suppose the local labor supply curve shifts leftward due to net migration of workers from the area. What happens to the equilibrium outcome in this labor market?
A) Labor demand shifts rightward; equilibrium wage and employment levels decline.
B) Labor demand shifts rightward; equilibrium wage and employment levels increase.
C) Labor demand curve remains the same; equilibrium wage and employment levels increase.
D) Labor demand curve remains the same, equilibrium wage increases, and employment declines.

Question

Quizplus · Accepted Answer

The labor supply curve shifting leftward means there are fewer workers available, which does not affect the company's demand for labor but does mean the company will have to pay higher wages to attract the remaining workers, leading to higher equilibrium wages but lower employment levels since fewer workers are available.

A Major Computer Software Company Maintains a Technical Support Center