If markets were perfect, then labor and other costs of production would be easily transferable.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, factors of production including labor and other costs are easily transferable between firms as there are no barriers to entry or exit. This leads to a situation where all firms in the market are paying the same wage rate for the same type of labor, and all costs of production are equalized across firms.

If Markets Were Perfect, Then Labor and Other Costs of Production