Downward Sloping labor supply

Downward sloping labor supply occurs when the quantity of labor that a worker is willing to offer decreases as their wage increases. This phenomenon is typically observed in labor markets with significant market power on the side of employers, or where government monopolies in labor markets exist. It can also occur when workers feel they may be priced out of the market due to rising wages, leading to them deciding to search for alternative employment opportunities. In addition, periods of high unemployment can also lead to an downward sloping labor supply curve, as workers lower their wage expectations in an attempt to secure employment.