Why is the increase in employment less than 5 thousand

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Reference no: EM13199270

Suppose that the supply and demand for professors is represented by the equations:

Supply: Ls = 1.3 W
Demand: Ld = 65 - 0.7 W

Where L is the number of professors (in thousands) and W = the wage.

a. Find the equilibrium wage and employment level
b. Graph the curves and indicate the equilibrium level
c. Suppose that population increases led to an increase in labor supply (a rightward shift) of 5 thousand professors. What are the equilibrium wage and employment level in this market? Why is the increase in employment less than 5 thousand?

Reference no: EM13199270

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