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Question: One of the main tenets of Keynes' theory was that while labor demand may shift as in part (b), wages do not change, at least in the short run. Keynes argued that this was the main reason for unemployment in a recession. From the article Sticky Wages, explain why wages may not change after the change in labor demand, and redraw your graph from (b) to reect this scenario. Is there unemployment in this scenario? (Unemployment will occur when, at a specic wage w, the supply of labor is larger than the demand for labor, so that more people are looking for jobs (supplying their labor) than job openings (demand for labor))
Consider a monopolist with constant marginal cost c(c
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