Asked by Claudio Hernandez on Jul 04, 2024
Verified
A firm hiring labor in a perfectly competitive labor market faces a
A) downsloping labor supply curve and upsloping labor demand curve.
B) upsloping labor supply curve and downsloping labor demand curve.
C) upsloping labor supply curve and horizontal labor demand curve.
D) horizontal competitive wage curve and downsloping labor demand curve.
Competitive Labor Market
A labor market scenario where numerous firms actively seek to hire from a large pool of available workers, with wage rates determined by supply and demand.
Labor Supply Curve
A graphical representation showing the relationship between the quantity of labor that workers are willing to offer and the wage rate, holding all other factors constant.
Labor Demand Curve
A graphical representation of the quantity of labor that employers are willing and able to hire at different wage rates.
- Describe the association between an entity's need for employees and the collective supply of labor within the market.
Verified Answer
SC
Serina CurryJul 11, 2024
Final Answer :
D
Explanation :
In a perfectly competitive labor market, firms face a horizontal competitive wage curve because they are wage takers, meaning they can hire as many workers as they want at the market wage without affecting the wage rate. The labor demand curve is downsloping, indicating that as wages decrease, firms are willing to hire more labor.
Learning Objectives
- Describe the association between an entity's need for employees and the collective supply of labor within the market.