FIGURE 14- 5
-Refer to Figure 14- 5.If this labour market were perfectly competitive,the predicted wage and employment level would be

Question

FIGURE 14- 5 
-Refer to Figure 14- 5.If this labour market were perfectly competitive,the predicted wage and employment level would be

Quizplus · Accepted Answer

If this labour market were perfectly competitive, the equilibrium wage and employment level would be at the intersection of the supply and demand curves, which is point A in the graph. At point A, the wage rate is W2 and the employment level is Q3. This is different from both the current wage and employment level (W1 and Q1) and the minimum wage and employment level (W3 and Q4) in the graph, indicating that the labour market is not perfectly competitive in reality.