What does it mean when an economist says that a firm is buying labor in a competitive market?
What will be an ideal response?
If a firm is buying labor in a competitive labor market, it is a price taker. This means that the firm has no control over the wage that it pays to its workers. It is sufficiently small to be able to hire all of the labor it wants at the market equilibrium wage. The firm would also not be able to hire any labor at wages below their market level.
You might also like to view...
A "market" is an arrangement that allows people to exchange things
Indicate whether the statement is true or false
Explain the idea of a tradeoff and think of three tradeoffs that you have made today
What will be an ideal response?
Which of the following is a final good or service?
a) a haircut purchased by a father for his 12 year-old son b) fertilizer purchased by a farm supplier c) diesel fuel bought for a delivery truck d) Chevrolet windows purchased by a General Motors assembly plant
The long-run effect of rent control on an area includes
A. less investment into the real estate market in the area. B. many new luxury apartments new luxury apartments will be built. C. rampant building of new low-income housing. D. new investors into the real estate market in the area.