A firm buying factors of production in a perfectly competitive factor market has a perfectly elastic demand curve for labor.

Name: A firm buying factors of production in a perfectly competitive factor market has a perfectly elastic demand curve for labor.
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Question

Quizplus · Accepted Answer

In a perfectly competitive factor market, it is the supply of labor that is perfectly elastic, not the demand. Firms are price takers and can hire as much labor as they need at the market price.

A Firm Buying Factors of Production in a Perfectly Competitive