Consider the labor market with the following demand and supply, respectively: Qd Qs 2 100+ N P = 2P Where: P represents hourly wage (dollars). In your graph, use the natural slopes for the Demand and Supply. Page 2 . N is the total number of firms demanding labor. Qd and Qs are quantities of labor (in thousands of people). 1. Suppose that N 40. Find the equilibrium and plot the market. 2. If the minimum wage is P = $50, what is the total number of people unemployed? Show in the graph. 3. The government wants to implement a law to allow new firms enter to the market (Remember they demand labor). Write an analysis of how this would result in a decrease in the level of unemployment. 4. After the law, 30 new firms entered the market. Make a numerical analysis and compare it with your previous answer. 5. What is the Economic Surplus and Deadweight Loss (before and after the change of demand)?