In a competitive factor market, the price of labour will increase as a firm hires more workers.

Question

Quizplus · Accepted Answer

In a competitive factor market, the price of labour is determined by the supply and demand of labour. As a firm hires more workers, the demand for labour increases, but the supply of labour also increases as more people enter the labour market. Therefore, the price of labour will not necessarily increase as a firm hires more workers, but will depend on the balance of supply and demand in the labour market.

In a Competitive Factor Market, the Price of Labour Will