Suppose the equilibrium quantity of labor hired decreases and the equilibrium real wage rate increases. All else constant, this situation will also result in

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If the equilibrium quantity of labor hired decreases and the equilibrium real wage rate increases, this means that firms are willing to pay higher wages for the same amount of labor. This increase in labor costs will ultimately be passed on to consumers in the form of higher output prices, as firms attempt to maintain their profit margins.

Suppose the Equilibrium Quantity of Labor Hired Decreases and the Equilibrium