Question

Could a product that has a higher supply than its demand influence employment? If yes, explain. (1 point)

No, it would not influence employment. Employment is only affected when the supply of a product is lower
than its demand. This would cause the factory to hire more workers, increasing employment.
Yes, it could influence employment. The factory that produces the product might increase employment and
hire more workers.
O No, changes to supply and demand do not typically influence employment.
Yes, it could influence employment. The factory that produces the product could layoff workers and reduce
employment.

Answer 1

A higher supply than demand for a product can lead to layoffs and decrease employment levels, as it causes a shift to the left in the demand for labor.

Step-by-step explanation:

Yes, a product that has a higher supply than its demand can indeed influence employment. When a factory produces a good in excess of demand, it may have to adjust to the decreased need for its product by reducing its workforce. This results in a shift to the left in the demand for labor, leading to potential layoffs and a reduction in employment levels within the company or industry.

Conversely, if there is an increase in the number of companies producing a given product, this usually leads to a higher demand for labor, causing a shift to the right in labor demand, and potentially increasing employment as more workers are needed to meet production demands. This dynamic applies to situations such as union worker productivity. If higher union wages are matched by higher productivity, the firm may see a shift to the right in employment levels, mitigating job losses. If not, the excess labor costs could lead to lower profits or even losses, and a consequent reduction in employment.