Suppose a labor market is described by the demand equation, Q_d = 60 - 2w, and the supply equation, Q_s = -10 + w, where Q_d is the quantity demanded of labor, Q_s is the quantity supplied of labor, and w is the wage (in dollars). What is the equilibrium wage in this labor market?

Question

Quizplus · Accepted Answer

The equilibrium wage is found where the quantity demanded equals the quantity supplied. Setting Q_d = Q_s, we get:60 - 2w = -10 + w3w = 70w = $23.33

Suppose a Labor Market Is Described by the Demand Equation