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32. How do wages equilibrate in the long run in the same labor market?

32. How do wages equilibrate in the long run in the same labor market?

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Answer - In the labor market considering the long run , the supply of the labor depends upon the size of the population and the supply is vertical and inelastic. The supply does not change with respect to wage rates in the long run. Hence in the long run , the demand curve for labor is downward sloping and the supply curve is vertical. The equlibrium point of the labor and wage is determined at the point where the demand curve will intersect the vertical supply curve.

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