Question 3 Consider a labor market in the following situation (Note: All the parameters are positive). (1) The labor supply (Ls) by workers is given as follows. (2) The labor demand (La) is obtained from solving the following profit maximization program of a producer. In the market the producer behaves as a price taker. In other words, he perceives that he could sell the product as much as possible at the current market price P. max п = РY - WL, Y = 1² (a) Involuntary unemployment is the state in which there exist worker, who want to work at a given (real) wage level. At what level of the real wage, could we see the presence of the involuntary unemployment in the market? (b) Find a locus of equilibrium employment along the passage of the price level P.