Problem
The market for labour can be described by two linear equations. Demand is given by P = 170 - (1/6)Q, and supply is given by P = 50 + (1/3)Q, where Q is the quantity of labour and P is the price of labour - the wage rate.
(a) Graph the functions and find the equilibrium price and quantity by equating demand and supply.
(b) Suppose a price ceiling is established by the government at a price of $120. This price is below the equilibrium price that you have obtained in part a. Calculate the amount that would be demanded and supplied and then calculate the excess demand.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.