In: Economics
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?
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.