Given labour demand=c-dw

Question

Labour supply=a+be
Determine the equilibrium w

Answer 1

To determine the equilibrium wage (w), we need to set the demand for labor equal to the supply of labor:

c - dw = a + be

Rearranging the equation, we have:

be + dw = c - a

Factoring out w on the left side of the equation, we get:

w(b + d) = c - a

Finally, dividing both sides of the equation by (b + d), we can solve for w:

w = (c - a) / (b + d)

So, the equilibrium wage is (c - a) / (b + d).