The following figure represents the equilibrium in the labor market.Figure 14.4
In the figure,
MFC: Marginal Factor Cost curve
D: Demand or the Marginal Revenue Product curve
S: Supply curve
-Refer to Figure 14.4. A competitive labor market will pay the wage rate _____ and hire _____ units of labor.

Question

The following figure represents the equilibrium in the labor market.Figure 14.4

In the figure,
MFC: Marginal Factor Cost curve
D: Demand or the Marginal Revenue Product curve
S: Supply curve
-Refer to Figure 14.4. A competitive labor market will pay the wage rate _____ and hire _____ units of labor.

Quizplus · Accepted Answer

At the point where the supply and demand curves intersect, which is point U1 in this case, the market is in equilibrium. This means that the wage rate paid will be WS1, and the quantity of labor hired will be QS1. In this case, the wage rate is W₂ and the quantity of labor hired is Q₂.

The Following Figure Represents the Equilibrium in the Labor Market