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Use a Typical Diagram of Supply and Demand for Labor

Question 177

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Use a typical diagram of supply and demand for labor to represent the market for lawyers. Suppose the wage for lawyers employed by large law firms is above the equilibrium level. Depict this scenario in your diagram. Will there be a shortage or a surplus of lawyers at this wage rate? This is an inefficient situation based on the supply and demand model. Give one reason why it may persist over time.

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If large law firms pay a wage higher tha...

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