labour markets

Question 1

if wage differentials exist…

Answer 1

then markets are IMPERFECT! MRP theory determines the wage paid, unlike in perfect competition

Question 2

5 main market imperfections

Answer 2

1. labour is not homogenous
   * different MRPS
   * difference supplies of labour
   * discrimination
2. non-monetary considerations
   * compensation wage differentials
3. labour immobility
   * occupational
   * geographical
   * imperfect info
4. trade unions
5. monopsony