Labor Supply and Demand Scenario Custom Research

Area of EmploymentThe argona of employment that will be used for this analysis is the true(a) estate industry more precisely, the specific bloodline function that will be the basis for the analysis is the real estate agent. The hypothetical shift that will shape the subsequent sections of this scenario is a high rent out growth rate.Why Has the Shift Occurred?The shift has occurred due to an increased demand for real estate, which has led to an increased demand for real estate agents to serve the require of potential buyers. It should be noted, however, that this shift has emerged in the real estate industry due to the fact that real estate presents an environment of perfect competition, whereby there are many competitors who can freely pursue opportunities in a free market setting (Mankiw, 2004).Direction of Shift in Labor Supply and penuryIn a scenario that represents increased numbers of real estate agents due to additional potential buyers of real estate, there are several e conomic factors at work. First, as demand for the product of real estate increases, so will the price of real estate, given a limited write out. Likewise, the demand for agents to sell the real estate will increase, and the cost of those agents (real wages) will increase while at the same time, the supply of agents will likely decrease. This is a demonstration of the neoclassical possibility of distribution (Mankiw, 2004).Effect of the Scenario on Labor Market EquilibriumThe effect that this scenario will have on labor market equilibrium is that as the supply of available real estate agents decreases, the price of those agents (wages) will increase. This in turn may slow the demand for agents overall if lower priced alternatives are sought, such as less employees taking on more responsibility. This is a classic example of equilibrium in labor demand (Mankiw, 2004). References(Mankiw N G 2004 Principles of Economics)Mankiw, N. G. (2004). Principles of Economics (3rd ed.). wampum Th omson South-Western.