with a variable money wage, when the labor demand curve shifts from MPN.Po to MPN. P1 as a result of the increase in price employment rises only to N Here we are as suming that there is no initial excess supply of labor. At wo, labor demand just equals sup ply along the labor curve money wage must rise from to get workers to increase labor supply. This increase in the money wage dampens the effect of the increase in labor demand. Because employment increases by less than in the fixed wage case, output supplied also increases by less, rising only to yi, as shown in Figure 8.12b. The increase level leads to a smaller rise in output supplied, and this relation- ship is reflected in the steeper aggregate supply curve for the variable-money-wage case, as shown in Figure 8.12c, the y(W variable) curve