Which of the following correctly describes a representative labor market?

Question

Quizplus · Accepted Answer

In a representative labor market, both the wage adjusts to balance supply and demand for labor (option A) and the wage equals the value of the marginal product of labor (option B) are correct. Additionally, an increase in the supply of labor increases the equilibrium wage (option C) is not necessarily true in all cases, as it depends on the elasticity of labor demand. Therefore, options A and B together encompass a more accurate depiction of a representative labor market.

Which of the Following Correctly Describes a Representative Labor Market