Labor can be bought and sold in a market like any other commodity. Therefore, which partly determines the price of labor?

Question

Responses

the law of supply and demand

the law of supply and demand

cost-benefit analysis

cost-benefit analysis

the circular-flow model

the circular-flow model

production possibilities frontier

Answer 1

The factor that partly determines the price of labor is the law of supply and demand.

In a labor market, the demand for labor (from employers) and the supply of labor (from workers) interact to establish wage levels. When demand for labor exceeds supply, wages typically rise, and conversely, when supply exceeds demand, wages may fall.