In the Following Graph, Q_S1 is the Supply Curve for Labour

question 89

Multiple Choice

In the following graph, Q_S1 is the supply curve for labour and Q_D1 and Q_D2 are the demand curves for labour. Refer to the graph to answer the question.
When Q_D1 shifts to Q_D2, _____.

• A) the equilibrium quantity of labour and the wage level remain unchanged
• B) the quantity of labour supplied increases
• C) the wage level falls to W₃
• D) the supply of labour exceeds the demand for labour

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Definitions:

Differentiated Products

Goods or services that are distinguished from each other based on quality, features, or branding, making them non-identical from a consumer's perspective.

Elastic Demand

A situation where the demand for a product is sensitive to price changes, meaning small price changes lead to large changes in quantity demanded.

Barriers To Entry

Factors that prevent or hinder new competitors from easily entering an industry or area of business, often maintaining high levels of profit for those already established.

Product Differentiation

The process of distinguishing a product or service from others in the market to make it more attractive to a particular target market.