Competitive labor markets see firms acting as though the marginal labor cost is constant.

Name: Competitive labor markets see firms acting as though the marginal labor cost is constant.
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In competitive labor markets, firms are price takers in the labor market, meaning they have no control over the wage rate. As a result, they treat the marginal labor cost as constant, since it is determined by the market wage rate.

Competitive Labor Markets See Firms Acting as Though the Marginal