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Question
Suppose there are 1000 firms in a market and all are identical. Firm A will hire 20 workers when the wage rate is $10, 25 workers when the wage rate is $9, and 30 workers when the wage rate is $8. The equilibrium wage rate for a number of years has been $9. If the wage rate falls to $8, we know that
A) the quantity demanded for the market will increase to 30,000 workers.
B) the quantity demanded for the market will increase to more than 30,000 workers.
C) the quantity demanded for the market will increase to less than 30,000 workers.
D) the quantity demanded for the market will increase, but we canʹt tell which of the above answers is correct.
Answer
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