Suppose the Labor Market Is Perfectly Competitive, but the Output

question 33

Multiple Choice

Suppose the labor market is perfectly competitive, but the output market is not. When the labor market is in equilibrium, the wage rate will:

• A) be less than the marginal revenue product of labor.
• B) equal the marginal revenue product of labor.
• C) be greater than the marginal revenue product of labor.
• D) None of the above is necessarily correct.

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