Truck drivers across the country are on strike in an effort to negotiate higher wages. Currently the labor market in this industry clears at W M and Q M , as shown in the figure below. - Refer to the scenario above. Assume that the negotiations were successful and a minimum wage has been implemented. Shortly thereafter, new technology that allows trucks to drive without drivers becomes available. How is the equilibrium in the driver market likely going to change? A) The new wage rate will be above W_M, the new quantity of drivers supplied will be above Q_M, and the new quantity of drivers demanded will be below Q_M. B) The new wage rate will be below W_M, and the new quantity of labor will be above Q_M. C) The new wage rate will be above W_M, and the new quantity of labor will be below Q_M. D) The new wage rate will be below W_M, the new quantity of drivers supplied will be below Q_M, and the new quantity of drivers demanded will be above Q_M.

Question

Quizplus · Accepted Answer

The introduction of driverless technology reduces the demand for drivers, leading to a surplus of labor at the minimum wage, where the quantity supplied exceeds the quantity demanded.

Truck Drivers Across the Country Are on Strike in an Effort