A perfectly competitive labor market is:
A)one in which there is a large number of workers and employers, none can affect the wage rates.
B)one in which there is a large number of workers and employers, most can affect the wage rates.
C)one in which there is a small number of workers and employers, one can affect the wage rates.
D)one in which there is a small number of workers and employers, all can affect the wage rates.
E)none of the above.

Question

Quizplus · Accepted Answer

A perfectly competitive labor market is characterized by a large number of workers and employers, where none can individually affect the wage rate. This means that the wage rate is determined solely by the intersection of the supply and demand curves in the labor market. In other words, there is no individual or group with market power to set or influence the wage rate. Therefore, the answer is A, as this is the only option that correctly describes a perfectly competitive labor market.

A Perfectly Competitive Labor Market Is