3.5.3 - Wage Determination In Competitive & Non-competitive Markets

Question 1

What Are The Characteristics Of A Perfectly Competitive Labour Market?
(5 Points)

Answer 1

~ Large pool of potential workers and employers.

~ Labour is homogenous.

~ Perfect information of market conditions for workers and firms.

~ Firms are wage takers (D=S).

~ No barriers to entry / exit for workers.