In the wage-setting/price-setting model of the labor market, a profit-maximizing firm will always hire an unemployed worker who offers to work for less than the prevailing equilibrium wage, as this directly lowers the firm's labor costs.
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Ch.1 The supply side of the macroeconomy: Unemployment and real wages - The Economy 2.0 Macroeconomics @ CORE Econ
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Labor Market Equilibrium Scenario
In an economy at its wage-setting/price-setting equilibrium, an unemployed individual, who is identical in skill to currently employed workers, approaches a firm and offers to do the same job for a slightly lower wage. According to the model, why is the firm most likely to reject this offer?
The Stability of Labor Market Equilibrium
Related
Labor Market Equilibrium Scenario
In an economy at its wage-setting/price-setting equilibrium, an unemployed individual, who is identical in skill to currently employed workers, approaches a firm and offers to do the same job for a slightly lower wage. According to the model, why is the firm most likely to reject this offer?
The Stability of Labor Market Equilibrium