Exhibit 10-5 A perfectly competitive labor market

-In Exhibit 10-5,at what wage rate will the firms hire these workers?

Question

Exhibit 10-5 A perfectly competitive labor market
 
-In Exhibit 10-5,at what wage rate will the firms hire these workers?

Quizplus · Accepted Answer

The wage rate set by the intersection of the supply and demand of labor curves is the equilibrium wage rate in a perfectly competitive labor market. In this exhibit, the equilibrium wage rate is $15.00, which is where the supply and demand curves intersect. Any wage rate above or below $15.00 would create a surplus or shortage of labor, respectively. Therefore, the firms would hire workers at the wage rate of $15.00 in this perfectly competitive labor market.

Exhibit 10-5 a Perfectly Competitive Labor Market