A typical firm hiring in a perfectly competitive labour market faces a marginal cost curve for labour that is

Question

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In a perfectly competitive labour market, the firm is a price taker and the supply of labour is perfectly elastic. Therefore, the wage rate (price of labour) is determined in the market and the firm faces a perfectly horizontal marginal cost curve for labour. This is because the firm can hire as many workers as it wants at the prevailing wage rate without affecting the wage rate.

A Typical Firm Hiring in a Perfectly Competitive Labour Market