Assume that this graph illustrates a perfectly competitive labor market. If the supply of person-hours in this market shifts to the right, then the equilibrium wage will ________ and the equilibrium number of person-hours will ________.

Question

Assume that this graph illustrates a perfectly competitive labor market.  If the supply of person-hours in this market shifts to the right, then the equilibrium wage will ________ and the equilibrium number of person-hours will ________.

Quizplus · Accepted Answer

As in markets generally, an increase in supply leads to a decrease in price (here, wage)and an increase in quantity demanded (here, person-hours).

Assume That This Graph Illustrates a Perfectly Competitive Labor Market