This Question 1 pt 80120 8 complete What happens to the eq

This Question: 1 pt | 80120 (8 complete) ? What happens to the equilibrium wage and quantity of labor if output price rises? O A. The equilibrium wage and the equilibrium quantity of labor fall O B. The equilibrium wage and the equilibrium quantity of labor rise O C. The equilibrium wage rises and the equilibrium quantity of labor falls. O D. The equilibrium wage falls and the equilibrium quantity of labor rises.

Solution

If the equilibrium wage and quantity of labour if output price rises then the equilibrium wage and the equilibrium quantity of labor rise. So the correct option is B. It is because the supply of labor is elastic and increases with the wage rate (upward sloping supply).