In a perfectly competitive labor market, the equilibrium quantity of labor is determined by:

Question

Quizplus · Accepted Answer

In a perfectly competitive labor market, the equilibrium quantity of labor is determined solely by the interaction of demand and supply. Collective bargaining between unions and management may lead to higher wages and benefits, but it does not affect the equilibrium quantity of labor. Similarly, the presence of large unions or large firms can influence wages and benefits, but it does not alter the overall equilibrium quantity of labor. Only changes in demand and/or supply of labor will affect the equilibrium quantity.

In a Perfectly Competitive Labor Market, the Equilibrium Quantity of Labor