Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
The equilibrium wage will rise as firms compete for fewer available candidates.
B
The equilibrium wage will fall since candidates are not willing to accept lower wages.
C
The equilibrium employment level will decrease as firms hire fewer workers due to wage concerns.
D
The equilibrium will remain unchanged as long as there are job openings available.
Understanding the Answer
Let's break down why this is correct
Answer
In this situation, the labor market equilibrium for software developers is likely to shift. When there is high demand for developers but candidates feel the wages are too low, many skilled individuals may choose not to apply for the positions. This creates a shortage of qualified developers in the market, as the supply of willing candidates does not meet the demand from companies. As a result, the tech company might need to raise their wages to attract more applicants, leading to a new equilibrium where the wages better reflect the skills of the developers. For example, if the company originally offered $70,000 but realizes that qualified candidates are looking for $80,000, they may increase their offer to meet the market's needs.
Detailed Explanation
When many people want a job but few apply, companies must offer higher pay to attract candidates. Other options are incorrect because Some might think that if candidates won't accept low pay, wages will drop; It's a common mistake to think fewer applicants means fewer hires.
Key Concepts
Labor Market Equilibrium
Demand and Supply in Labor Markets
Wage Determination
Topic
Labor Market Equilibrium
Difficulty
hard level question
Cognitive Level
understand
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