If the labor market is perfectly competitive:
A)the equilibrium wage will be equal to the minimum wage.
B)the rate of unemployment will be zero.
C)the wage rate will be the same in all the industries.
D)the demand for labor will be perfectly inelastic.

Question

Quizplus · Accepted Answer

In a perfectly competitive labor market, wage rates are the same in all industries because workers have perfect information about job opportunities and can easily move from one industry to another. However, this does not mean that the equilibrium wage will be equal to the minimum wage or that the rate of unemployment will be zero. Furthermore, the demand for labor will not be perfectly inelastic, as firms will still respond to changes in the wage rate by adjusting employment levels.

If the Labor Market Is Perfectly Competitive