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MARKET FOR LABOUR

No involuntary Unemployment. MARKET FOR LABOUR. LABOUR MARKET IN EQUILIBRIUM. S L. 0Q = Actual employment. Q-QF = Voluntary Unemployment. W. D L. 0. Q F. Q. Actual employment. Voluntary Unemployment. W. W. MARKET FOR LABOUR. LABOUR MARKET IN DISEQUILIBRIUM. S L.

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MARKET FOR LABOUR

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  1. No involuntary Unemployment MARKET FOR LABOUR LABOUR MARKET IN EQUILIBRIUM SL 0Q = Actual employment Q-QF = Voluntary Unemployment W DL 0 QF Q Actual employment Voluntary Unemployment

  2. W W MARKET FOR LABOUR LABOUR MARKET IN DISEQUILIBRIUM SL Involuntary unemployment Voluntary Unemployment DL 0 QD QS QF Actual employment

  3. W W MARKET FOR LABOUR LABOUR MARKET IN DISEQUILIBRIUM SL Voluntary Unemployment SHORTAGE DL 0 QD QS QF

  4. INSTITUITIONAL & SOCIAL CONSTRAINTS • Labour markets like other markets will tend to return to equilibrium’ • However, this does not happen because of barriers put in the Market place. • These barriers could be either placed by GOVERNMENT regulations like: • Minimum Wages or 2) Regulations regarding workplace safety 3) LABOUR UNIONS: They tend to pressure the wages to remain at higher levels. These wages are known as ‘STICKYWAGES’ as they are not allowed to fall below when the market forces require it to.

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