If both the demand for labour and the supply of labour increase, then the equilibrium wage rate ________ and the equilibrium quantity of labour ________.

Question

Quizplus · Accepted Answer

When both the demand for and supply of labour increase, the effect on the equilibrium wage rate is uncertain without knowing the relative magnitudes of the shifts in demand and supply. However, the equilibrium quantity of labour will increase as both shifts suggest a higher quantity of labour being employed at equilibrium.

If Both the Demand for Labour and the Supply of Labour