In a labor market equilibrium, the equilibrium wage is defined as the wage at which the quantity of labor supplied equals the quantity of labor demanded. What happens if the wage is set above this equilibrium wage?

When the wage is set above the equilibrium wage, it creates a situation where more people want to work than there are jobs available. This is because higher wages attract more workers, leading to an increase in the quantity of labor supplied. However, employers may not be able to hire as many workers at this higher wage, resulting in a decrease in the quantity of labor demanded. For example, if a company can only afford to hire ten workers at a high wage, but twenty people want to work, there will be ten people who are willing but unable to find a job. This creates unemployment for those extra workers who want to work at the higher wage but cannot find a position.