If the demand for a product decreases, the equilibrium quantity of labor producing that product decreases and the equilibrium wage increases.

Question

Quizplus · Accepted Answer

When the demand for a product decreases, the equilibrium quantity of labor producing that product typically decreases due to reduced production needs, and the equilibrium wage decreases as well because the demand for labor decreases.

If the Demand for a Product Decreases, the Equilibrium Quantity