Figure 19-6
-Refer to Figure 19-6. This figure depicts labor demand and supply for the widget industry. The equilibrium market wage is $15. If a labor union forms within the widget industry and subsequently negotiates an hourly wage of $20.00, then there will be an
A)excess demand of 50 labor hours.
B)excess demand of 20 labor hours.
C)excess supply of 20 labor hours.
D)excess supply of 50 labor hours.

Question

Figure 19-6​ 
-Refer to Figure 19-6. This figure depicts labor demand and supply for the widget industry. The equilibrium market wage is $15. If a labor union forms within the widget industry and subsequently negotiates an hourly wage of $20.00, then there will be an
A)excess demand of 50 labor hours. 
B)excess demand of 20 labor hours. 
C)excess supply of 20 labor hours. 
D)excess supply of 50 labor hours.

Quizplus · Accepted Answer

When the wage is increased to $20, which is above the equilibrium wage of $15, the quantity of labor supplied will exceed the quantity of labor demanded, resulting in an excess supply of labor.

Figure 19-6​ -Refer to Figure 19-6. This Figure Depicts Labor Demand and Labor

Figure 19-6 -Refer to Figure 19-6. This Figure Depicts Labor Demand and Labor