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If the labour market is perfectly competitive, labour demand function is given by ND = a + bW and labour supply function is given by
If the labour market is perfectly competitive, labour demand function is given by ND a bW and labour supply function is given by NS c dW; W is the wage rate, and a b c and d are constants. At market equilibrium, we can determine the market wage rate as:
a
a cd b
b
a cd b
c
a cd b
d
a cd b
e
d ba c
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