Suppose there is a competitive market for retail workers at a large shopping mall that is large enough to constitute its own labour market.The labour demand curve is QD = 1000 - 20(w).The labour supply curve is QS = 400 + 40(w).What is the equilibrium level of employment?

Question

Quizplus · Accepted Answer

At equilibrium, the quantity of labour demanded must equal the quantity of labour supplied. 
QD = QS 
1000 - 20(w) = 400 + 40(w) 
Solving for w, we get w = $15. 
Substituting w into either the labour demand or supply equation, we get Q* = 700. 
Therefore, the equilibrium level of employment is 700 workers.

Suppose There Is a Competitive Market for Retail Workers at a Large