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Question
In what respect do the supply and demand curves in the labour market differ from those in the goods market?
Solution
The supply and demand curves in the labour market differ from those in the goods market in the following ways:
1) In a goods market, the demand for goods is made by consumers or households; while in a labour market, the demand for labour is made by firms.
2) In a goods market, the supply of goods is made by firms; while in a labour market, the supply of labour is made by households.
So, in a goods market, firms act as suppliers; in a labour market, households act as suppliers.
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Price (Rs ) |
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2 |
2 |
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3 |
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