What is a competitive factor market graph?

As you can observe from the graph, this is a perfectly competitive factor market graph. The market sets the price at which to hire the labor, and if you look over the firm graph, you can see how the firm employs ten workers at that wage. Also, note how they hire where MRC=MRP.

How do you draw a competitive factor market?

The Market When drawing a perfectly competitive factor market, there are generally two side by side graphs; one for the industry (the market) and one for the firm. The industry (or market) is a standard supply and demand curve. The equilibrium wage (price) in the market establishes the wage each firm will pay its workers.

What drives a factor market?

The factor market is driven by demand in the product market. The resources needed to produce goods and services are created or obtained in sufficient quantities to satisfy demand in the product market. In effect, the consumer market dictates the factor market. What Transactions Take Place in a Factor Market?