Answer:
A. Equilibrium Wage : Fall , Equilibrium Employment : Increase
Explanation:
Labour Demand (by producers) & Labour Supply (by workers) are analogous to commodity demand (by consumers) & supply (by producers) by consumers at various prices (wages).
Labour Demand Curve is downward sloping due to wage , demand inverse relationship - more demand at lower wages & vice versa.
Labour Supply Curve is upward sloping (upto a point) due to wage , aupply inverse relationship - more supply at higher wages & vice versa.
If Labour supply increases , curve shifts to the right : It will create excess supply of that labour, which will create competition among sellers (labourers) & reduce wage rate and at the new reduced wage rate , the labour demand will be more . So , the new equilibrium will be established at lowered wage rate , more employment.
