Given the demand and supply schedules or curves competitive market equilibrium can be determined

Given the demand and supply schedules or curves competitive market equilibrium can be determined

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Given the demand and supply schedules or curves competitive market equilibrium can be determined. In Figure 54, DD and SS represent the competitive labor demand curve and the competitive supply curve respectively. The two curves intersect at point e which is a point of equilibrium. Under equilibrium condition, N number of workers offer supply of labor and receive the wage rate W. If labor market shows a greater homogeneity and if the qualitative variations are very
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Unformatted text preview: few then the supply curve will be more flexible as represented by S 1S1. With such a supply curve under the given demand conditions, a new point of equilibrium e1 is established. At this point more workers N1 offer services at a lower wage rate W1 . Thus demand and supply conditions together determine level of employment and rate of wages in a competitive market ....
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