which of the following would result from low labor demand and higher demand and high labor supply
wages stat the same
wages rise
wages rise dramatically
wages decline
From the given options, the most likely outcome of low labor demand and high labor supply with wages remaining the same or not changing would be that wages decline. This is because when there is a surplus of labor (high labor supply) and limited job opportunities (low labor demand), employers have the advantage and can negotiate lower wages.
Wages rising or rising dramatically would generally be a result of high labor demand and limited labor supply, where employers are willing to pay higher wages to attract and retain workers. Since the scenario you provided indicates a low labor demand, it is unlikely that wages would rise in such a situation.
When there is low labor demand and high labor supply, the outcome on wages would depend on several factors. However, based on the given options, the most likely result would be that wages decline. This is because with an excess supply of labor and limited demand, employers have more bargaining power and can offer lower wages. It is important to note that this is a general trend and other factors such as government policies, market conditions, and competition can also influence wages.
To determine the outcome of low labor demand and high labor supply on wages, we need to understand the relationship between labor demand, labor supply, and wage levels.
Labor demand refers to the number of workers or amount of labor that employers are willing to hire at a given wage rate. It depends on factors such as business conditions, productivity, and demand for goods and services.
Labor supply refers to the number of workers or amount of labor available in the market at a given wage rate. It depends on factors such as population growth, immigration, and the willingness of workers to work at different wage levels.
Now, let's analyze the different scenarios:
1. Wages stay the same: If labor demand is low and labor supply is high, but wages remain unchanged, it suggests that there is an equilibrium in the labor market. The supply of available workers matches the level of demand, resulting in no need for wage adjustments.
2. Wages rise: If the demand for labor increases or the supply decreases, while the other remains constant, there could be upward pressure on wages. This situation may occur if there is increased investment, economic growth, or a shift in consumer preferences leading to higher demand for certain goods or services. As a result, employers may need to offer higher wages to attract workers.
3. Wages rise dramatically: A dramatic increase in wages would typically occur when there is a significant shortage of labor supply relative to labor demand. This can happen in specialized industries or occupations, where there is a scarcity of skilled workers or a sudden surge in demand. Employers might need to compete aggressively to hire workers, leading to substantial wage increases.
4. Wages decline: If labor demand is low and labor supply is high, it is possible that wages could decline. This situation can occur when there is an oversupply of workers relative to available job opportunities. Employers have more options to choose from, leading to lower wages as workers compete for limited positions.
In summary, a low labor demand and high labor supply scenario with wages staying the same or declining are more likely outcomes, while a rise in wages or a dramatic rise in wages would require changes in labor demand or supply dynamics.