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When the real wage is above the level that equilibrates supply and demand, then the quantity of labor supplied:

A) Increases
B) Decreases
C) Remains the same
D) Cannot be determined

User Daniqua
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1 Answer

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Final answer:

When the real wage is above the equilibrium level, the quantity of labor supplied increases, leading to a surplus of labor and potential unemployment.

Step-by-step explanation:

When the real wage is above the level that equilibrates supply and demand in the labor market, this typically leads to a situation where the quantity of labor supplied is greater than the quantity of labor demanded. In theory, this would mean that more individuals are willing and able to work at the higher wage rate, so the quantity of labor supplied increases. However, due to the wage sticking above the equilibrium, employers will not be willing to hire all these workers, which creates unemployment.

User Testerab
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