i know this is quite similar to the perfectly elastic demand curve for individual firm in perfectly competitive market. but what i don't get is that why is the "supply" curve horizontal but not the demand curve for labour horizontal?
i think it like this: in a product market, firms are sellers and consumers are buyers
in a labour market, firms are buyers and workers are sellers
So, in perfectly competitive product market, sellers/firms are price takers so can only sell at market price or else demand for their product will fall to zero, so demand curve is horizontal.
In a perfectly competitive labour market, sellers/workers are wage takers so can only have their wage rate at market wage level or else demand for them will fall to zero. so shouldn't it be the demand curve being horizontal?
But i know the demand curve for labour is downward sloping because of the diminishing return and MRP thing and i get that! pls help me!
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why is the supply curve for labour in perfectly competitive market horizontal? watch
- Thread Starter
- 11-10-2017 00:26