Explore BrainMass
Share

Explore BrainMass

    Finding equilibrium wage and employment level

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Assume demand and supply conditions in the competitive market for unskilled labor are as follows:

    P= $15 - 0.3QD (Demand)

    P= $0.2QS (Supply)

    where Q is millions of hours of unskilled labor and P is the wage rate per hour.

    A. Illustrate the industry equilibrium wage/employment combination both graphically and algebraically.

    B. Calculate the level of excess supply (unemployment) if the Federal minimum wage is raised from $5.15 to $6 per hour.

    © BrainMass Inc. brainmass.com October 10, 2019, 2:36 am ad1c9bdddf
    https://brainmass.com/business/strategy-and-business-analysis/finding-equilibrium-wage-employment-level-385363

    Solution Preview

    Please refer attached file for graph.

    A. Illustrate the industry equilibrium wage/employment combination both graphically and algebraically.

    P = $15 - 0.3QD (Demand)
    or 0.3QD=15-P
    QD=50-(10/3)P

    P = $0.2QS (Supply)
    or QS=5P
    Equilibrium wage will be equal to wage ...

    Solution Summary

    Solution describes the steps to find out equilibrium wage and employment level in the given scenario.

    $2.19