Competitive Labor Market In your economics course, you have learned a lot about supply and demand in the market for goods and services. Now, it is time to apply your knowledge of this model to explore the labor marketthe market where people trade their skills for wages. Unlike in the market for goods and services, it is firms who demand (buy) labor whereas consumers are those who supply (sell) labor. The price paid to labor is now called wage. Similarly to the market for goods and services, the quantity of labor hired by firms as well as wages are influenced by whether or not the labor market is competitive. This activity will focus on a perfectly competitive labor market with many sellers and buyers of labor services. Here, wages and salaries are determined by the intersection of the demand for labor and the supply of labor. By studying labor markets, you will be able to answer such questions as "How are earnings determined?" and "What accounts for the wide differences in earnings?" In this activity you will be introduced to the concepts of demand for labor, supply of labor, and labor market equilibrium from a graphical perspective. The activity will