Which of the following factors explain inter-industry wage differentials?
A) the industry's product market
B) the degree of capital intensity
C) a large labor market
D) all of the above

Question

Quizplus · Accepted Answer

All of the factors listed (product market, capital intensity, and labor market size) can impact inter-industry wage differentials. The industry's product market may affect demand for labor and therefore wages, while the degree of capital intensity may impact the skill level required for jobs and thus wages. A larger labor market may increase competition for jobs, leading to lower wages, or it may provide more opportunities for high-paying positions.

Which of the Following Factors Explain Inter-Industry Wage Differentials