If the labor market is perfectly competitive,________.

Question

Quizplus · Accepted Answer

In a perfectly competitive labor market, there is no excess supply or demand for labor, and the wage rate is determined by the intersection of the labor demand and supply curves. At this equilibrium point, a worker willing to work can instantly find work at the going wage rate. There may still be some unemployment due to frictional or structural factors, but it is not a persistent or systemic issue. Option A is incorrect because the presence of some unemployment is possible but not necessary in a perfectly competitive labor market. Option B is incorrect because it represents a situation of excess labor demand, which would result in an upward pressure on wages and a shift in the equilibrium point. Option D is incorrect because it presents an inverse relationship between labor demand and supply, which is not consistent with the assumptions of a perfectly competitive labor market.

If the Labor Market Is Perfectly Competitive,________