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    Determination of Wages Under Perfect Competition

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    Anonymous O1Q6Md
    The document discusses the determination of wages under perfect competition and monopoly. It defines wages and outlines the key features of the labor market under perfect competition. It also discusses the limitations of perfect competition theory for wage determination and introduces the concept of wages being determined under monopoly. The document further explains the differences between monetary wages and real wages.

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    Determination of Wages Under Perfect Competition

    Uploaded by

    Anonymous O1Q6Md
    49 views6 pages
    The document discusses the determination of wages under perfect competition and monopoly. It defines wages and outlines the key features of the labor market under perfect competition. It also discusses the limitations of perfect competition theory for wage determination and introduces the concept of wages being determined under monopoly. The document further explains the differences between monetary wages and real wages.

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    The document discusses the determination of wages under perfect competition and monopoly. It defines wages and outlines the key features of the labor market under perfect competition. It also discusses the limitations of perfect competition theory for wage determination and introduces the concept of wages being determined under monopoly. The document further explains the differences between monetary wages and real wages.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    49 views6 pages

    Determination of Wages Under Perfect Competition

    Uploaded by

    Anonymous O1Q6Md
    The document discusses the determination of wages under perfect competition and monopoly. It defines wages and outlines the key features of the labor market under perfect competition. It also discusses the limitations of perfect competition theory for wage determination and introduces the concept of wages being determined under monopoly. The document further explains the differences between monetary wages and real wages.

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    © All Rights Reserved
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    You are on page 1of 6

    Determination of Wages under

    perfect competition
    Meaning & Definitions:

    A wages may be defined sum of


    money paid under contract by an employer to a
    worker for services rendered .
    ---By Benham
    By wages we mean a price paid for
    the services of labour of any kind .
    ---By
    Raymond.T.Bye

    Determination
    of
    wages
    In perfect competition following features are
    found in labour market .
    Large no. of buyers [employers] and sellers
    [owners].
    All the units of labour are homogeneous .
    Workers are fully mobile and they can easily
    switch over from one working place to another
    Workers are not organized in trade union or
    workers party and they cannot put pressure on
    employers .

    Limitations
    In real business practice no perfect

    competition is found .
    This theory is a reproduction of price
    determination of goods under perfect
    competition .
    It fails to explain long run changes in wages
    rates .
    It neglects government policies and
    bargaining by trade unions .

    Determination of wages under


    Monopoly
    Introduction:

    Wages determination in monopoly


    is a unique situation following circumstances
    are found under this situation .
    In this market the firm has monopoly in
    product market .
    In labour market however there is perfect
    competition .Therefore the supply curve of
    labour is perfectly elastic.
    The demand curve will be negatively sloping.

    Monetary Wages
    o Monetary wages is a wage which a workers

    receives in terms of money.


    o Monetary wages is a narrow concept.
    o Monetary wages does not gives proper idea of
    standard of living, lifestyle and purchasing
    power.
    o Ex: If a factory worker is paid Rs10,000 he can
    purchase things worth Rs10,000.

    Real Wages
    Real wages refers to the total amount of goods

    and commodities which a worker buy with


    monetary wages.
    Real wages is a Broad concept.
    Real wages give proper idea lifestyle and
    standard of living.
    In real wage a worker is given monetary wages
    + facilities, allowances, reimbursement,
    comfort, luxuries and benefits. Thus he can
    have more benefits than monetary wages.

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