MPN. Po to MPN P1, and employment rises from No to N1. Recall from the discussion in the previous section that in the fixed-money-wage case, we assume that there is an excess supply of labor. The labor supply curve in this case, given by Ns (w=W),is to the right of No at W(as in Figure 8.7). Labor supply is no constraint on employment, which is deter- mined solely by labor demand For this case of W=W, output supplied can be seen from Figure 8.12b to rise from yo to y1. The aggregate supply curve is given by y(W=W) in Fig- ure 8.1