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15 August, 17:54

What happens to the equilibrium wage and quantity of labor if output price rises?

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  1. 15 August, 18:11
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    both the equilibrium wage and the equilibrium quantity of labor will rise.

    Explanation:

    The equilibrium market wage rate is the cross section or intersection of the supply and demand variables for labour. Like the graph shows below, these two variables are correlated, meaning one rises so does the other. Therefore if output price rises it means that both the equilibrium wage and the equilibrium quantity of labor will rise.
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