In the perfectly competitive market, the labor supply curve faced by the individual firm is ________, while that of the market is ________.

Question

Quizplus · Accepted Answer

In a perfectly competitive market, the labor supply curve faced by an individual firm is perfectly elastic because the firm can hire as much labor as it wants at the market wage. The market labor supply curve is upward sloping, indicating that as wages increase, more labor is supplied to the market.

In the Perfectly Competitive Market, the Labor Supply Curve Faced