Suppose the market for autoworkers is initially in equilibrium, but then the demand for automobiles increases and simultaneously the automakers allow autoworkers workers less flexibility working at the plants. What happens in the market for autoworkers?

Question

Quizplus · Accepted Answer

The increase in demand for automobiles will shift the demand curve for autoworkers to the right, leading to an increase in the equilibrium wage rate. The decrease in flexibility for autoworkers will shift the supply curve for autoworkers to the left, leading to a decrease in the equilibrium quantity of labor.

Suppose the Market for Autoworkers Is Initially in Equilibrium, but Then