All else equal, if the demand for Starbucks coffee increases, then which of the following will follow in the labor market for baristas?
A) Labor demand will decrease.
B) Equilibrium wage will decrease.
C) Equilibrium quantity of labor hired will decrease.
D) Equilibrium wage will increase.

Question

Quizplus · Accepted Answer

When the demand for Starbucks coffee increases, the company will need more baristas to meet the higher demand for their product. This leads to an increase in the demand for labor (baristas), which typically results in a higher equilibrium wage for those workers as Starbucks competes to attract more or retain their existing staff.

All Else Equal, If the Demand for Starbucks Coffee Increases