Draw the graph · Micro · Labor market
Product sales collapse
Drag a curve sideways, or use its arrows. A curve you do not move is a curve you are saying stays put. Make each shift clear enough that a reader could see it.
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Labor demand shifts left. Labor supply stays put.
Labor demand is derived from the demand for what workers produce. When coal sells for less, each miner brings in less revenue, so mines want fewer workers at every wage. Labor demand shifts left. Labor supply is unchanged. The lower wage moves some miners out along their supply curve.
The wage falls and employment falls.
Common mistake. Students often shift labor supply left because 'miners leave the industry.' They leave because the wage fell. The first move was on the demand side, driven by the coal price.
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