In a perfectly competitive labor market, the equilibrium wage level is determined by:

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In a perfectly competitive labor market, the equilibrium wage level is determined by the intersection of supply and demand. The demand for labor comes from employers who are willing to hire workers at a certain wage, while the supply of labor is the willingness of workers to work at a certain wage. Through this interaction, the market determines the equilibrium wage level where the quantity of labor demanded equals the quantity of labor supplied. Large firms or unions may have some influence on the labor market, but in a perfectly competitive market, no single entity has the power to set the wage level.

In a Perfectly Competitive Labor Market, the Equilibrium Wage Level