The supply curve of truck drivers is upward sloping and demand curve is downward sloping. A reduction in the price of hauling freight by truck relative to the price of hauling freight by rail will ____ the equilibrium wage of truck drivers and ____ the number of drivers employed.

Question

Quizplus · Accepted Answer

The reduction in the price of hauling freight by truck relative to the price of hauling freight by rail will make trucking more attractive relative to rail, leading to an increase in the demand for truck drivers. This will shift the demand curve for truck drivers to the right, resulting in a higher equilibrium wage and a greater number of drivers employed.

The Supply Curve of Truck Drivers Is Upward Sloping and Demand