If labour markets were perfectly competitive,

Question

Quizplus · Accepted Answer

Even in a perfectly competitive labour market, wage differentials could still exist because of differences in workers and jobs. Factors such as education, experience, productivity, and demand for specific skills can lead to wage differentials. Discrimination could also still exist as it would not be regulated in a perfectly competitive market. Option A, D, and E are incorrect because they assume that all workers are identical in skills and experience, which is not realistic in a competitive labour market.

If Labour Markets Were Perfectly Competitive