Suppose the market for pizza makers is initially in equilibrium, but then the equilibrium wage rate increased and the equilibrium quantity of labor will decreased. What happened in the market for pizza makers?

Question

Quizplus · Accepted Answer

The increase in the equilibrium wage rate along with a decrease in the equilibrium quantity of labor suggests that the supply of pizza makers decreased. This is because a decrease in supply, with demand remaining constant, would lead to higher prices (wages, in this case) and lower quantities.

Suppose the Market for Pizza Makers Is Initially in Equilibrium