The Analysis of Competitive Markets Consider the market for labor:Suppose the supply of low-skilled labor is given by

LS = 20w

where LS is the quantity of low-skilled labor (in millions of persons employed each year), and w is the wage rate (in dollars per hour). The demand for labor is given by

LD = 360 = 20w

Suppose that instead of a minimum wage, the government pays a subsidy of $2 per hour for each employee. What will the total level of employment be now? What will the equilibrium wage rate be?