Question refers to the following diagram: -Suppose the wage is currently W₁ and L₁ is the level of employment.If this market is characterized by delayed supply responses,in the immediate period the wage will: A)rise and employment will rise B)rise and employment will remain unchanged C)remain unchanged and employment will rise D)remain unchanged and employment will remain unchanged

Question

Quizplus · Accepted Answer

In markets with delayed supply responses, an increase in demand for labor will initially raise wages as firms compete for the available workers, but the level of employment may not change immediately due to the time it takes for the supply of labor to respond to higher wages.

Question Refers to the Following Diagram