Which of the following is true about the equilibrium market wage? A.All workers are satisfied with the wage.

Question

Quizplus · Accepted Answer

The equilibrium market wage is the wage at which the quantity of labor supplied equals the quantity of labor demanded. At this wage rate, there is no surplus or shortage of labor, and the market clears. While workers may not be completely satisfied with the wage, and employers may not be thrilled about paying it, the fact that the market has reached equilibrium indicates that both sides have found it acceptable. There may still be some unemployment in the market, but it would not be due to the wage rate being too high or too low - it would be due to other factors, such as frictional or structural unemployment. Competitive employers do not have market power with respect to the equilibrium wage, as any single employer's ability to affect the market wage is limited.

Which of the Following Is True About the Equilibrium Market