Assume that the labor market for coffee roasters is in equilibrium.
a.Graph this labor market.
b.A new ad campaign by the coffee industry, "A coffee a day keeps the sleepies away," is successful and consumers prefer more coffee.Graph the effect of this on equilibrium wages (W₁) and quantity of labor (L₁) of workers.Label the new equilibrium W₂ and L₂.
c.At the old W₁, what situation exists? How does the labor market adjust to the new W₂?

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The Answer of Assume that the labor market for coffee roasters is in equilibrium.
a.Graph this labor market.
b.A new ad campaign by the coffee industry, "A coffee a day keeps the sleepies away," is successful and consumers prefer more coffee.Graph the effect of this on equilibrium wages (W₁) and quantity of labor (L₁) of workers.Label the new equilibrium W₂ and L₂.
c.At the old W₁, what situation exists? How does the labor market adjust to the new W₂?

Assume That the Labor Market for Coffee Roasters Is in Equilibrium