Exhibit 11-4 Supply and demand curves for food servers
-If the equilibrium wage rate in Exhibit 11-4 increased, the cause could be that:

Question

Exhibit 11-4 Supply and demand curves for food servers 
-If the equilibrium wage rate in Exhibit 11-4 increased, the cause could be that:

Quizplus · Accepted Answer

An increase in the equilibrium wage rate could be caused by either an increase in demand for labor or a decrease in supply of labor. Both of these would shift the supply and demand curves to the right, resulting in a higher equilibrium wage rate. Option A is incorrect because an increase in labor supply would shift the supply curve to the right, resulting in a lower equilibrium wage rate. Option B is incorrect because a decrease in demand for labor would shift the demand curve to the left, resulting in a lower equilibrium wage rate. Option D is incorrect because if the equilibrium wage rate increased, there must be some underlying cause to explain it.

Exhibit 11-4 Supply and Demand Curves for Food Servers