What is the equilibrium wage and quantity for taxi drivers in the scenario shown in the link below? http://postimage.org/image/bi4xpxo3f/
Given the data in this table, the equilibrium wage for taxi drivers in this market will be $8.50 per hour. At that wage, 650 taxi drivers will be supplied and demanded.
The equilibrium wage for workers in a given market will be the wage at which the quantity supplied of those workers is the same as the quantity demanded. At that wage, there will be neither a surplus nor a shortage of workers. In this table, we can see that the quantity supplied drops 100 drivers for every $1 that the wage goes down. Similarly, the quantity demanded drops 100 drivers for every $1 that the wage goes up. We can see that there is a surplus of drivers at $9 per hour and a shortage at $8 per hour. Exactly in between those two wage levels (at $8.50 per hour) there will be an equilibrium in which 650 taxi drivers are demanded and 650 taxi drivers are willing to work.
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