Suppose that the supply curve for bus drivers is Ls= 15,000 + 250W and the demand...

Suppose that the supply curve for bus drivers is

Ls= 15,000 + 250W

and the demand curve is

Ld = 85,310 - 145W

Where L = the number of bus drivers and W= the daily wage

1. Plot the supply and demand curves

2. What are the equilibrium wage and employment levels in this market?

Solutions

Expert Solution

1. The graph of supply and demand:

2. Equilibrium is where demand for labor meets the supply of labor.
Accordingly, wage rate = $178; Employment = 59,500 workers are employed at the prevailing wage rate.

Rahul Sunny answered 2 years ago

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