The figure given below shows the demand curves (D1 and D2) and supply curves (S1 and S2) of labor in the labor market. Figure: 15.2
According to Figure 15.2, assume that the market is in an initial equilibrium in which the labor supply is S1 and the labor demand is D1.Then labor supply shifts from S1 to S2 but the wage remains at its previous equilibrium level.Which of the following is true?
A) The economy is still in equilibrium.
B) There is a shortage of 20 workers.
C) There is a shortage of 30 workers.
D) There is a surplus of 30 workers.
E) There is a surplus of 20 workers.
Correct Answer:
Verified
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