Use the accompanying table, which shows the supply and demand schedules for workers in the country of Hovian, to answer the questions that follow.

-If the wage is temporarily set at $25,it will need to __________ in order to restore equilibrium.
A) rise
B) fall
C) remain unchanged
D) decrease to zero
E) increase to $30

Question

Use the accompanying table, which shows the supply and demand schedules for workers in the country of Hovian, to answer the questions that follow.
 
-If the wage is temporarily set at $25,it will need to __________ in order to restore equilibrium.
A) rise 
B) fall 
C) remain unchanged 
D) decrease to zero 
E) increase to $30

Quizplus · Accepted Answer

In order to restore equilibrium, the wage must fall if it is temporarily set above the equilibrium wage level, as a higher wage would lead to excess supply of labor.

Use the Accompanying Table, Which Shows the Supply and Demand