The reason that the supply curve for labor in a purely competitive market rises is because:
A) the wage rate paid to workers falls as more are hired.
B) the marginal product of labor falls as output increases.
C) marginal resource cost rises as productivity increases.
D) higher wages must be paid to bid workers away from other opportunities.

Question

Quizplus · Accepted Answer

In a purely competitive labor market, there is no monopoly power and all employers are price takers. This means that they have to pay a higher wage rate to attract more workers because there are limited job opportunities available. As the number of workers available in the market increases, the marginal cost of labor also increases, leading to a higher supply curve for labor. Therefore, the correct answer is D.

The Reason That the Supply Curve for Labor in a Purely