Multiple Choice
Truck drivers across the country are on strike in an effort to negotiate higher wages. Currently the labor market in this industry clears at WM and QM, as shown in the figure below.
- Refer to the scenario above. Assume that the negotiations were successful and a minimum wage has been implemented. Shortly thereafter, new technology that allows trucks to drive without drivers becomes available. How is the equilibrium in the driver market likely going to change?
A) The new wage rate will be above WM, the new quantity of drivers supplied will be above QM, and the new quantity of drivers demanded will be below QM.
B) The new wage rate will be below WM, and the new quantity of labor will be above QM.
C) The new wage rate will be above WM, and the new quantity of labor will be below QM.
D) The new wage rate will be below WM, the new quantity of drivers supplied will be below QM, and the new quantity of drivers demanded will be above QM.
Correct Answer:
Verified
Correct Answer:
Verified
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