In a competitive labour market,it is observed that the equilibrium wage rate and employment level have both risen.One can infer that

Question

Quizplus · Accepted Answer

If both the equilibrium wage rate and employment level have risen, it indicates an increase in the demand for labour. This means that firms are willing to pay higher wages to attract workers, and are also hiring more workers. The fact that both the wage rate and employment level have increased suggests that there is no increase in labour supply, as this would have put downward pressure on the wage rate. Therefore, the best choice is E: the demand for labour has increased.

In a Competitive Labour Market,it Is Observed That the Equilibrium