If at the prevailing real wage rate, the quantity of labor supplied exceeds the quantity demanded,

Question

Quizplus · Accepted Answer

When the quantity of labor supplied exceeds the quantity demanded, it means there is a surplus of labor. This puts downward pressure on wages, which means the real wage rate is greater than the equilibrium real wage rate. Therefore, option C is the correct answer. A and B are incorrect because a rise in the real wage rate would only happen if there was a labor shortage, which is not the case, and there is no shortage of labor in this scenario. Option D is incorrect because there is a surplus of labor, which means there is an imbalance in the labor market.

If at the Prevailing Real Wage Rate, the Quantity of Labor