Labor Demand and Labor Supply

question 14

Multiple Choice

Labor Demand and Labor Supply

The following questions refer to the accompanying diagram, which shows an industry's labor demand and labor supply. Labor and capital are the only factors used by the industry. The industry hires L units of labor at a wage of PL.


-Refer to Labor Demand and Labor Supply.What does area A + B + C represent?

• A) The industry's total revenue.
• B) The rent earned by the industry's laborers.
• C) The total wages paid to the industry's laborers.
• D) The rent earned by the industry's capital.

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