Asked Oct 4, 2019

Resource Price (Labor Market)

What do you expect businesses would do if the average wage was below equilibrium?  What if it's above?   How would this affect unemployment?


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Expert Answer

Step 1

For any business to expand and sell more in the market, it has to reduce and minimize its inputs such as raw materials and labor costs. At the stage, where the average wage is below the equilibrium, it would lead to a higher demand fo...

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