In some labor markets, the supply of labor is as follows (where W represents wages and L represents the number of employees):

W = 113 + 0.21L

However, the demand for labor is:

W = 958 -0.28L

a) At what salary and number of employees is equilibrium in this labor market?

b) If, however, the wage is different from the equilibrium wage of 1%, how much unemployment or excess demand in the number of people will be considered in the market? A positive percentage means an increase from the equilibrium wage, while a negative percentage means a decrease from the equilibrium wage.

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To solve this problem we need to find the equilibrium wage and the number of employees at equilibriu... View the full answer