Suppose There Are 1000 Firms in a Market and All

question 334

Multiple Choice

Suppose there are 1000 firms in a market and all are identical. Firm A will hire 20 workers when the wage rate is $10, 25 workers when the wage rate is $9, and 30 workers when the wage rate is $8. The equilibrium wage rate for a number of years has been $9. If the wage rate falls to $8, we know that

• A) the quantity demanded for the market will increase to 30,000 workers.
• B) the quantity demanded for the market will increase to more than 30,000 workers.
• C) the quantity demanded for the market will increase to less than 30,000 workers.
• D) the quantity demanded for the market will increase, but we can't tell which of the above answers is correct.

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