Suppose that the factor market for computer engineers is competitive in India and the United States,but Indian engineers earn one-fifth of what American engineers earn.This means that engineers in India are price takers,but engineers in America are not.

Question

Quizplus · Accepted Answer

In a competitive market, both Indian and American engineers would be price takers, as wages are determined by supply and demand. The difference in earnings does not imply a difference in market structure.

Suppose That the Factor Market for Computer Engineers Is Competitive