Explanation There are many factors of production such as the land, labor, capital, machinery and so on. Labor is an important factor of production among them because it makes use of the available resources and transforms the raw materials into the finished goods and services. The market where the labor power is brought and sold is known as the labor market, and the labor market equilibrium takes place at the point where the labor supply curve intersects the labor demand curve. The labor market condition in the economy is illustrated as follows: Option (e): The labor market equilibrium under competitive market occurs at the point where the demand for labor equals the supply of labor. It is obtained at a point where the demand curve for labor and the supply curve of labor intersects with each other in the market. From the given exhibit, it is observed that the point where the two curves intersect with each other is at point F. Therefore, the equilibrium wage and number of workers will be determined at point F. Thus, option 'e' is the correct answer. Option (a): The labor market equilibrium is obtained at the intersection of the demand for labor and the supply of labor curves in the economy. The point A is the point where the supply of labor and the marginal factor cost are equal, which means that it is not the equilibrium...

The equilibrium in the labor market.

Micro Economics For Today

10th Edition

ISBN: 9781337613064

Author: Tucker, Irvin B.

Publisher: Cengage,

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Chapter 11, Problem 13SQ

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The equilibrium in the labor market.

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Chapter 11, Problem 12SQ

Chapter 11, Problem 14SQ

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