The graph shows the market for tomato pikers in solution Cal

The graph shows the market for tomato piker\'s in solution California. What is the equilibrium wage rate and the equilibrium quantity of pickers employed?

Solution

Market equilbrium occurs where demand(D)=supply(S)

Equilbrium wage rate is 4.5 $ per hour and equilbrium quantity of pickers employed is 7000.

If minimum wage is fixed at 3 $per hour, then from diagram, then it is not binding because equilbrium wage is above minimum wage rate.So employed will be 7000 and unemployed will be 0.