Suppose the market for landscape workers in Kitchener, Ontario, can be described by the following labour demand and supply equations: LD = 900 - 5 w and LS = 125 + 30 w.

Calculate the equilibrium wage and employment in this market.

equilibrium wage

equilibrium employment

Suppose the local government passes a bill requiring all employers in this industry to provide bottled water to each worker to protect them from hot weather. This has been estimated to cost employers $ 1.7 per worker per hour. This way, workers do not need to purchase water by themselves, so that the bill effectively increases the wage by $ 1.7 per hour.

Calculate the new equilibrium wage and employment.

equilibrium wage

equilibrium employment