The use of the supply and demand model to analyze labor markets implicitly assumes that there

Question

Quizplus · Accepted Answer

The assumption that there are many buyers and sellers of labor is central to the supply and demand model. This is because the model is based on the idea that market prices are determined through the interactions between buyers (in this case, employers) and sellers (workers), each of whom is motivated by their own self-interest. When there are many buyers and sellers, no one buyer or seller has the power to influence prices in the market, so prices are ultimately determined by the forces of supply and demand.

The Use of the Supply and Demand Model to Analyze