Apple Harvest Wages
The question
The competitive labor market for apple pickers in Orchardia is in equilibrium. The world price of apples rises sharply, and orchards can sell all of their output at the new price. Show the effect of the higher apple price on the labor market for apple pickers, holding all else constant. Show the effect on the Labor Market graph.
Drag a curve, or use the arrow buttons. Want the free-play version with every control? Open this graph in the sandbox.
Apple Harvest Wages: the worked answer
On the Labor Market graph, Labor demand (DL) shifts right.
Why Labor demand (DL) shifts right
In a competitive labor market, the demand for labor is the marginal revenue product of labor, which equals marginal product times the price of the output. A higher apple price raises each worker's MRP, so orchards are willing to hire more pickers at every wage. Workers' willingness to supply labor has not changed, so only the demand side of the market is affected.
What happens to the equilibrium
The equilibrium market wage rises and the level of employment increases.
The mistake students make on this one
Many students also shift labor supply right, reasoning that the higher wage will attract more pickers into the orchards. The wage increase is the RESULT of the demand shift, and workers responding to it move ALONG the existing supply curve; nothing changed how many people were willing to work at any given wage.
On exam day
Whenever the stem changes the price of the OUTPUT, go straight to MRP = MP x P and shift only labor demand; the wage is an outcome you read off the new equilibrium, never a cause.
How this is graded
The checker reads every curve's position before and after your answer. You are marked correct only when Labor demand (DL) shifts right and every other curve on the Labor Market graph stays where it started — the same standard an AP reader applies to a drawn graph: the right shift, and nothing extra. There is no AI involved; the rubric is the geometry.
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