A typical firm hiring in a perfectly competitive labour market faces a marginal cost curve for labour that is

Question

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In a perfectly competitive labour market, the firm is a price taker and faces a horizontal supply curve for labour at the prevailing wage rate. As a result, the firm's marginal cost curve for labour is also horizontal and equal to the wage rate. This is because the firm can hire as many workers as it wants at the going wage rate without affecting the wage rate itself.

A Typical Firm Hiring in a Perfectly Competitive Labour Market