So where do we go from here? One natural approach is to start from Figure 8.3 "Labor Market" but look for circumstances in which we would see unemployment. Figure 8.4 "Unemployment in the Labor Market" shows us that there will be unemployment if the real wage in the market is too high—that is, above the equilibrium real wage. In this case, the amount of labor that workers want to sell is greater than the amount that firms want to buy. Some workers will want a job at this wage but be unable to find one. They will be unemployed.
***Figure 8.4 "Unemployment in the Labor Market" shows us what the labor market must look like for there to be unemployment, but it is hardly an explanation of unemployment. Economists typically expect markets to look like ***Figure 8.3 "Labor Market", not ***Figure 8.4 "Unemployment in the Labor Market". That is, they think that the price in a market—in this case, the real wage—adjusts quickly to ensure that supply equals demand. If we want to explain unemployment with a picture like ***Figure 8.4 "Unemployment in the Labor Market", we also need some story of why real wages might be sticky, so they remain above the equilibrium wage.
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