Question

Recently, there has been an increase in the market demand for products of firms in manufacturing industries. The production of many of these products requires the skills of welders. Because welding is a dirty and dangerous job compared with other occupations, in recent years fewer people have sought employment as welders. Draw a diagram of the market for the labor of welders. Use this diagram to explain the likely implications of these recent trends for the market clearing wage earned by welders and the equilibrium quantity of welding services hired.

Short answer

The wage rate increases from ${\mathrm{OP}}_{}$to ${\mathrm{OP}}_1$and quantity of labor increases from ${\mathrm{OQ}}_{}$to ${\mathrm{OQ}}_1$. The shifted demand curve is $D_1{D}_1$. The firm wouldable to higher labor at high wage rate.

Step-by-step solution

Introduction

The demand for labor could be a derived demand. Demand for labor depends on the wage rate and price of the merchandise. An increase within the market demand for products of firms in manufacturing industries will results in increase within the priceof those products.

Given Information

The assembly of those product required skill labor thus, the worth of marginal product of labor increases in addition $(VMPL\uparrow =P\uparrow \times MPL)$. VMPL shows the amount of workers the firm will hire at different wage rate. Thus, VMPL curve is nothing but the labor demand curve.

Explanation

In the marketplace for the labor of welders the manufacturing industries is on the demand side of the market. The manufacturing industries demand labor because it requires products which are utilized in the assembly of products for the manufacturing industries. The increase within the demand for the products of the manufacturing industries will shift the demand curve for the labor to the correct.

In the above diagram, $x$-axis indicates the amount of the labor and $y$-axis indicates the wages. there's a rise within the demand for the products; this increment ends up in shift the demand curve tothe proper.

Thus, ${\mathrm{OP}}_1$ is that the wage rate earned by the labors and ${\mathrm{OQ}}_1$ is that the equilibrium quantity of the labors, which is indicated by the $E$point.