how do markets determine the wages ?
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Answer:
Classical economists argue that wages—the price of labor—are determined (like all prices) by supply and demand. They call this the market theory of wage determination. When workers sell their labor, the price they can charge is influenced by several factors on the supply side and several factors on the demand side. The most basic of these is the number of workers available (supply) and the number of workers needed (demand). In addition, wage levels are shaped by the skill sets workers bring and employers need, as well as the location of the jobs being offered. When the city recently named by Forbes Magazine as the most miserable city in America (we don't want to make them more miserable by naming them; look it up on the Google) advertises for a city planner, it may have to sweeten the pot to attract good talent.