/*! This file is auto-generated */ .wp-block-button__link{color:#fff;background-color:#32373c;border-radius:9999px;box-shadow:none;text-decoration:none;padding:calc(.667em + 2px) calc(1.333em + 2px);font-size:1.125em}.wp-block-file__button{background:#32373c;color:#fff;text-decoration:none} Q. 14 What is a perfectly competitive ... [FREE SOLUTION] | 91影视

91影视

Log out

Learning Materials

Features

Discover

Chapter 14: Q. 14 (page 350)

What is a perfectly competitive labor market?

Short Answer

Expert verified

In a completely competitive labor market, businesses can hire as many people as they want at the going market wage.

Step by step solution

01

Definition

Perfectly competitive labor market:

Each firm is a wage taker in a completely competitive labor market, where the wage rate is set by the industry rather than by the individual firm.

02

Explanation

A perfectly competitive labour market is one in which businesses can hire as much workers as they want at market rates. Consider secretaries in a big metropolis. Employers who require secretaries will most likely be able to hire as many as they require if they pay the going salary rate. This means that the market will determine the true equilibrium pay, and the labor supply to each particular firm will be completely elastic at the market rate.

03

Conclusion

Therefore, this allows businesses to hire as many workers as they want at market rates.

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Over 30 million students worldwide already upgrade their learning with 91影视!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

How does a bilateral monopoly affect the equilibrium wage and employment levels compared to a perfectly competitive labor market?

What is the marginal cost of labor?

If the United States allows a greater quantity of highly skilled workers, what will be the impact on the average wages of highly skilled employees?

Does the earnings gap between the average wages of females and the average wages of males prove labor market discrimination? Why or why not?

Describe how affirmative action is applied in the labor market.
See all solutions

Recommended explanations on Economics Textbooks

Taxation Economics

Read Explanation
View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.