Explain how labor mobility costs can create upward sloping labor suppy curves for indivfual firms.

Expert Solution

The labour mobility cost creates the upward sloping labour supply curve for individual firms because the labour mobility depends on the opportunity and the wage rate if the wage rate is high than the availability of labour or labour supply is high and if which rate is low then the availability of labour supply is also so low.

Labour mobility means the availability of labour in an easy manner so if the availability of labour is good then it creates the upward sloping labour supply curve because labours are ready to work at any wage rate it is a simple concept of direct relationship between the labour availability and the labour cost if the labour cost is less then producer demand more labour and that’s why labour supply curve shows the upward rising curve.

Labour is the most important factors of production in the economy so it mobility cost directly related to the supply of labour in the market.

Rahul Sunny answered 1 year ago

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