The competitive labor market determines the equilibrium wage and employment on the basis of market supply and demand.

Question

Quizplus · Accepted Answer

In a competitive labor market, the equilibrium wage and level of employment are determined by the intersection of the supply of labor (workers offering their services) and the demand for labor (employers seeking workers), ensuring that the quantity of labor supplied matches the quantity demanded at the equilibrium wage.

The Competitive Labor Market Determines the Equilibrium Wage and Employment