Asked by Daman Preet Dhillon on Jul 22, 2024
Verified
Assume the market for candles is competitive. A decrease in the market price of candles
A) decreases the demand for workers who make candles and decreases their equilibrium wage.
B) decreases the demand for workers who make candles and increases their equilibrium wage.
C) increases the demand for workers who make candles and decreases their equilibrium wage.
D) increases the demand for workers who make candles and increases their equilibrium wage.
Market Price
The price at which a good or service is offered in the marketplace, determined by supply and demand.
Demand for Workers
The total amount of labor or workforce that employers are willing and able to hire at a given wage rate and time.
Equilibrium Wage
The wage rate at which the quantity of labor demanded by employers equals the quantity of labor supplied by workers, resulting in no excess supply or demand in the labor market.
- Comprehend the impact of market price alterations of goods on the demand for labor and wage levels.
Verified Answer
HG
Hussein GhaziJul 23, 2024
Final Answer :
A
Explanation :
A decrease in the market price of candles would lead to a decrease in the demand for workers who make candles because producers would be earning less from each candle sold. This would also decrease the equilibrium wage for these workers, as the demand for labor decreases, putting downward pressure on wages.
Learning Objectives
- Comprehend the impact of market price alterations of goods on the demand for labor and wage levels.