1.6.3 The determination of relative wage rates and levels of employment in perfectly competitive labour markets
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Competitive labour market basics

Competitive labour market basics

Competitive labour market graph with labour demand and labour supply crossing at equilibrium, plus a rightward shift in labour demand causing a higher wage and higher employment

A labour market is where workers supply labour and firms demand it. In a perfectly competitive labour market there are many employers and many workers, so each is a wage-taker and accepts the market wage. The diagram uses wage on the vertical axis and employment on the horizontal axis.

1.6.3 The determination of relative wage rates and levels of employment in perfectly competitive labour markets Lesson

  1. A Level
  2. /Economics
  3. /1.6.3 The determination of relative wage rates and levels of employment in perfectly competitive labour markets