Supply, Demand, & Equilibrium - Essay Example

04 July 2008 Supply, Demand, and Equilibrium The wage of a worker as with the price of goods in the market is determined by supply and demand. It should be noted that in the labor market, as with the goods market, some workers are “valued” higher than the others thus demanding the payment of higher wages compared to the employees in other profession. Using real world example, professional sports players are paid much higher than farmers, factory workers, engineers, and teachers even though all of them are generally in competitive markets.

In order to assess this situation, this paper will conduct an analysis using the diagram of supply and demand. In the first case, it will look at farmers, factory workers, engineers, and teachers. It should be noted that these occupations have generally unlimited supply meaning a lot of people can be employed in these jobs. In the United States alone, factory workers and engineers abound looking for a job. Thus, we can see an upward sloping curve where more workers will be willing to work for a higher income.

The demand on the other hand is more or less horizontal as the job market generally has limited slots for teachers, factory workers, engineers, and farmers. The, intersection of demand and supply determines the average wage. It should be noted that this is often fixed and is determined by the demand curve. The workers under consideration often accept what is offered by the companies which hire them. The market of professional sports players are also competitive yet faces a far different situation than what is discussed above.

It should be noted that as opposed to the market of typical players, professional sports players supply is limited because their career is often determined by their skills and abilities together with the reception of audiences to them. The length and intensity of training required for a professional player is far from what is undergone by an ordinary farmer or factory worker. It should be noted that the supply curve of professional players is upward sloping yet more leftward than the case of farmer, teachers, engineers, and factory workers as these players require more compensation for their trainings and performance.

In the market of professional players, some players are even paid higher than the others. Look at the case of Michael Jordan compared to other basketball players. It is irrefutable that he is paid more than four times what is being paid the average player in NBA. In his case, the supply curve is vertical because there is only one Michael Jordan. Because his reservation wage is higher, he is also set to accept the highest wage offered to him.