Question

In the labor market, supply is described by the equation (W-18)/0.0017 = L

and demand is described by W = -0.0014L+210 W is the wage (price of labor) and L is the number on the labor market (quantity)

How many people are in the labor market when it is balanced?

Answer 1

To find the balanced number of people in the labor market, supply and demand equations are set equal to one another. Solving for L, the quantity of labor, reveals that when the labor market is in equilibrium, there are approximately 61,935 people in the labor market.

Step-by-step explanation:

To determine the number of people in the labor market when it is balanced, we need to find the point where the supply of labor equals the demand for labor. According to the supply equation given as (W - 18) / 0.0017 = L, and the demand equation W = -0.0014L + 210, the equilibrium can be found by setting the two equations equal to each other.

First, we express the supply equation in terms of W:

• W = 0.0017L + 18

Next, we'll set the supply equation equal to the demand equation to solve for L:

• 0.0017L + 18 = -0.0014L + 210

Now let's solve for L:

• 0.0017L + 0.0014L = 210 - 18
• 0.0031L = 192
• L = 192 / 0.0031
• L = 61,935 (rounded to the nearest whole number)

Therefore, when the labor market is in equilibrium, there are approximately 61,935 people in the labor market.