If the wage rate is below the equilibrium,then:

Question

Quizplus · Accepted Answer

If the wage rate is below the equilibrium, employers will be willing to hire more workers at that wage rate. This will bid up the wage rate until it reaches equilibrium. Therefore, choice B is the correct answer. Choices A and C are not correct because a wage rate below equilibrium will actually lead to an increase in the supply of labor as more workers will be willing to work at that wage rate. Unemployment does not necessarily result from a wage rate below equilibrium as long as the wage rate is still above the worker's reservation wage.

If the Wage Rate Is Below the Equilibrium,then