Question

If more firms were to find ways to induce larger numbers of workers to hold true to labor supply commitments, would the market labor supply curve tend to shift to the left or to the right? Explain your reasoning.

Short answer

A higher wage or salary, that is, a higher labour market price, reduces the amount of labour demanded by employers, whereas a lower wage or salary increases the amount of labour demanded. As labour supply expands, the supply curve shifts to the right, putting downward pressure on wages.

Step-by-step solution

Introduction.

A firm is a for-profit business organization that provides professional services, such as a corporation, limited liability company (LLC), or partnership. Most businesses only have one location.

Reason for increase in workers supply.

A rise in population increases the supply of labour; a decrease decreases it.

Labor organizations have generally opposed increased immigration because their leaders fear that an increase in labour supply will shift the supply curve to the right, putting downward pressure on wages.

Demand of supply in Labor Market.

Labor markets, like goods markets, have demand and supply curves. In labour markets, the law of demand works as follows: A higher salary or wage that is, a higher labour market price decreases the quantity of labour demanded by employers, whereas a lower salary or wage increases the quantity of labour demanded.

As a result, the labour supply curve in the market tends to shift to the Right.