Asked by Ericka Eldridge on May 14, 2024
Verified
If a firm is hiring a certain type of labor under purely competitive conditions:
A) its labor demand curve will be perfectly elastic at the market-determined wage rate.
B) the labor supply curve will lie above the marginal labor cost curve.
C) the labor supply and marginal labor (resource) cost curves will coincide and be upsloping.
D) the labor supply and marginal labor (resource) cost curves will coincide and be perfectly elastic.
Purely Competitive
A market structure characterized by many buyers and sellers, free entry and exit, and a homogenous product.
Labor Demand Curve
A graphical representation that illustrates the quantity of labor that employers are willing and able to hire at different wage rates.
Marginal Labor Cost
The additional cost incurred by hiring an extra unit of labor.
- Establish the conditions that facilitate the optimization of profits for a firm in labor and product markets.
- Learn about the properties of labor supply in multiple market conditions.
Verified Answer
LA
Look At Curry ManMay 18, 2024
Final Answer :
D
Explanation :
Under purely competitive conditions, a firm faces a perfectly elastic labor supply at the market-determined wage rate, meaning it can hire all the labor it wants at that wage. Therefore, the labor supply and marginal labor cost curves coincide and are perfectly elastic.
Learning Objectives
- Establish the conditions that facilitate the optimization of profits for a firm in labor and product markets.
- Learn about the properties of labor supply in multiple market conditions.