In a Competitive Labour Market, an Increase in the Demand

question 4

Multiple Choice

In a competitive labour market, an increase in the demand for labour might be due to an increase in the

• A) supply of the other factors.
• B) demand for the product that labour produces.
• C) wage rate.
• D) supply of labour.
• E) supply of the product that labour produces.

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Definitions:

Perfect Competition

Perfect competition is a market structure characterized by a large number of small firms, homogeneous products, and easy entry and exit from the market.

Consumer

This defines an individual who purchases goods and services for personal use, driving demand in the market.

Price

The monetary charge expected, imposed, or given in settlement for something.

Price Takers

Market participants who accept the prevailing market price without having the influence to alter it.