Beneficial supply shock

L*

L*'

A beneficial supply shock
raises the MPN at all
levels of labor input

MPN

Labor, N

ND¹

ND²

The effect of a beneficial supply 
     shock on labor demand

f = If(2 ≤ x ≤ 6, 10 / x)
g = If(3 ≤ x ≤ 7, f(x - 1) + 1)
A = Intersect(xAxis, yAxis)
B = Point(xAxis)
C = Point(yAxis)
a = Segment(C, A)
b = Segment(A, B)
Wage = 3.3 (slider from 3 to 4.8, step 0.3)
c: y = Wage
D = Intersect(f, c, (3.030303030303148, 3.299999999999872))
F = Intersect(g, c, (5.347826086956667, 3.299999999999923))
E: (x(D) + 1, g(x(D) + 1))
u = Vector(D, E)
G: (x(D), 0)
H: (x(F), 0)
t = false
d = Segment(D, G)
e = Segment(F, H)
I = Intersect(c, a)
J: (8, Wage)
h = Segment(I, J)
K: (6, f(6))
L: (7, g(7))