In a perfectly competitive resource market the labor supply curve facing the single firm is
A) vertical.
B) horizontal.
C) downward sloping.
D) upward sloping.

Question

Quizplus · Accepted Answer

In a perfectly competitive resource market, the firm is a price taker and can hire as much labor as it wants at the going market wage rate, implying a perfectly elastic or horizontal labor supply curve. This means that the firm can increase or decrease its labor input without affecting the market wage.

In a Perfectly Competitive Resource Market the Labor Supply Curve