We would expect that a fall in labor supply will have a proportionately smaller effect on the market wage rate when
A) workers can easily be replaced by capital goods.
B) the product produced in the industry has very few substitutes.
C) the product is produced in a perfectly competitive industry.
D) labor represents a relatively small portion of total costs.
A
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In the long run, a perfectly competitive firm
A) can make either an economic profit or a normal profit. B) incurs an economic loss. C) makes zero economic profit. D) can make an economic profit, zero economic profit, or incur an economic loss. E) makes an economic profit.
In the figure above, if a minimum wage of $6 per hour has been imposed and the labor demand curve then shifts from D0 to D1 the wage rate ________ and the amount of employment ________
A) falls; decreases B) does not change; increases C) does not change; decreases D) falls; increases