Which of the following is a true statement about competitive labor markets?
A) Fringe benefits will never arise in a competitive labor market.
B) Workers of the same skill level will earn different prices.
C) Payroll taxes are levied on employees.
D) Adjustments along the intensive margin arise when firms enter the market.
E) In a competitive labor market,all participants are price takers.

Question

Quizplus · Accepted Answer

In a competitive labor market, participants are price takers because no single firm or worker has enough market power to influence the market price. Fringe benefits may arise in a competitive labor market as a way for firms to attract and retain workers. Workers of the same skill level may earn different prices due to factors such as differences in experience, productivity, and negotiations. Payroll taxes are typically split between employers and employees, but are ultimately paid by the employee through reduced take-home pay. Adjustments along the intensive margin can arise from changes in the quantity or quality of labor that firms demand or workers supply, but do not necessarily arise when firms enter the market.

Which of the Following Is a True Statement About Competitive