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Calculate free market equilibrium wage and quantity of labor

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Reference no: EM131642923

Question: Suppose that you have been hired to analyze the impact on employment from the imposition of a minimum wage in the labor market. Further suppose that you estimate the demand and supply functions for labor, where L stands for the quantity of labor (measured in thousands of workers) and W stands for the wage rate (measured in dollars per hour).

Demand: LD = 100 - 4W

Supply: LS = 6W

First, calculate the free market equilibrium wage and quantity of labor. Now suppose the proposed minimum wage is $12. How large will the surplus of labor in this market be?

Reference no: EM131642923

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