What is the equilibrium wage and quantity for taxi drivers in the scenario shown in the link below?  http://postimage.org/image/bi4xpxo3f/

Expert Answers
pohnpei397 eNotes educator| Certified Educator

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.