Question

“Increase in the price of a commodity ‘X’ has no relationship with the
level of employment in perfectly competitive product and factor markets”.
Is this statement True or False? Justify and logically analyze your
argument. Draw graphs if necessary.

Answer 1

I Think True The economy is at full employment level ; ... If price of X falls leading to increase in total outlay on X, the demand of X is. (a) Elastic ... In the long run a firm in perfect competition earns.