Side by Side Graphs in a Perfectly Competitive Labor Market
Definition
In a perfectly competitive labor market, side by side graphs are used to illustrate the interaction between the demand and supply of labor. The demand graph shows the quantity of labor demanded at different wage rates, while the supply graph shows the quantity of labor supplied at different wage rates.
Related terms
Equilibrium Wage Rate: The wage rate at which the quantity of labor demanded equals the quantity of labor supplied in a perfectly competitive labor market.
Surplus Labor: When there is an excess supply of labor, meaning more people are willing to work than there are available jobs.
Shortage of Labor: When there is an excess demand for labor, meaning there are more job openings than there are people willing to work.
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Study guides (1)
AP Microeconomics - 5.3 Perfectly Competitive Labor Markets
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