What is total employment and the competitive wage

Reference no: EM13237923

A country's labor market is characterized by labor demand and labor supply
given by the following equations:
LD = 100 - 5W
LS = 10W - 20
where LD and LS are the quantity of labor demanded and supplied respectively, in millions of workers, and W is the hourly wage rate.

(a) Suppose the labor market adjusts to competitive equilibrium. What is total employment (L) and the competitive wage (W)?

(b) Suppose instead that there is a minimum wage of W = 9. What then is the quantity of labor supplied (LS), the number of unemployed workers (U), and the unemployment rate (u)?

Reference no: EM13237923

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