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A firm's labour demand and labour supply equations are shown below. Labour demand equation: L d = 40 - 2( w ) Labour supply equation:
A firm's labour demand and labour supply equations are shown below.
Labour demand equation:Ld= 40 - 2(w)
Labour supply equation:Ls= 20 + 3(w),
wherewis the wage per hour worked.
Instructions:Round your answers to the nearest whole number.
a. The equilibrium wage is $________, and the equilibrium quantity of labour employed is________people.
b. The workers, thinking that their wages are too low, decide to strike.After tense negotiations, the firm decides to raise the wage by 50 percent.
After the wage increase,________ people are unemployed.
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