Figure 10.3
-In Figure 10.3 an increase in the supply of labor will cause the equilibrium

Question

Quizplus · Accepted Answer

An increase in the supply of labor will lead to a surplus of labor (more workers than available jobs). This will put downward pressure on wages, causing them to decrease as employers can hire from a larger pool of workers. At the same time, since employers can hire more workers at a lower wage, they will increase the number of hours of labor used. Therefore, the wage will decrease and the hours of labor used will increase, leading to a movement along the demand curve from the initial equilibrium point.

Figure 10.3 -In Figure 10.3 an Increase in the Supply of Labor