When wages are above equilibrium levels, there is an excess supply of workers in the form of unemployment.

Question

Quizplus · Accepted Answer

When wages are above the equilibrium level, it indicates that employers are willing to pay more than what the equilibrium wage rate would be. As a result, there would be more workers who would like to work at that wage rate than there are jobs available. This creates an excess supply of workers, leading to unemployment.

When Wages Are Above Equilibrium Levels, There Is an Excess