Refer to the information provided in Figure 28.2 below to answer the question(s) that follow. Figure 28.2
-Refer to Figure 28.2. If this firm pays the efficient wage of $11

Question

Refer to the information provided in Figure 28.2 below to answer the question(s) that follow.  Figure 28.2
-Refer to Figure 28.2. If this firm pays the efficient wage of $11

Quizplus · Accepted Answer

At an efficient wage of $11, the quantity supplied of labor is 4,000 while the quantity demanded is only 1,000. Therefore, there will be an excess supply (surplus) of labor of 3,000. The equilibrium wage will only be reached if the wage falls to the market-clearing wage of $8, where the quantity demanded equals the quantity supplied at 2,000.

Refer to the Information Provided in Figure 28