If the supply of labor increases while demand for labor is unchanged,
A)the real wage and labor productivity will increase.
B)the real wage will decrease and labor productivity will increase.
C)the real wage will increase and labor productivity will decrease.
D)the real wage and labor productivity will decrease.

Question

Quizplus · Accepted Answer

When the supply of labor increases with unchanged demand, the increased competition among workers tends to decrease the real wage. Labor productivity may also decrease because more workers are available to perform the same amount of work, potentially leading to underutilization of each worker's skills.

If the Supply of Labor Increases While Demand for Labor