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Which of the following would result from low labor demand and high labor supply?

A. Wages rise
B. Wages decline
C. Wages rise dramatically
D. Wages stay the same

User Jmcg
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1 Answer

8 votes

Answer:

B. Wages decline

Step-by-step explanation:

Labor is subject to the laws of supply and demand, just like other commodities in the market. Low labor demand means there are only a few job opportunities available. The unemployment rate will be high. The economy will be having too many people without jobs.

An increase in the supply of labor implies more people coming to the job market. The Job market will experience a surplus in labor supply, which will lead to reduced wages. There will be too many jobless people chasing few job opportunities. Employers will consider the lowest labor cost, while desperate job seekers will be willing to accept low wage rates.

User Stklik
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