Consider the following statements about the market supply curve of labour:
(A) It is obtained by adding up the labour supplied by individuals at different wages.
(B) It bends backward at high wages, like the individual labour supply curve.
(C) It slopes upward because at higher wages no individual wishes to work less.
(D) It slopes upward because at higher wages many more individuals are attracted to supply labour.
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → (A) and (D) only
(A) It is obtained by adding up the labour supplied by individuals at different wages. — Correct. The market curve is found by adding up what all individuals supply at each wage.
(B) It bends backward at high wages, like the individual labour supply curve. — Incorrect. Only the individual curve bends backward. The market curve slopes upward.
(C) It slopes upward because at higher wages no individual wishes to work less. — Incorrect. At higher wages some individuals may work less. The market curve still slopes up because many others join in.
(D) It slopes upward because at higher wages many more individuals are attracted to supply labour. — Correct. At higher wages many more individuals come forward to supply labour, which outweighs those who work less.
NCERT (2026-27): “Wage Determination in Labour Market … At low wage rates, the first effect dominates the second and so the individual will be willing to supply more labour with an increase in wage rate. But at high wage rates, the second effect dominates the first and the individual will be willing to supply less labour for every increase in wage rate. Thus, we get a backward bending individual labour supply curve which shows that up to a certain wage rate for every increase in wage rate, there is an increased supply of labour. Beyond this wage rate for every increase in wage rate, labour supply will decrease. Nevertheless, the market supply curve of labour, which we obtain by aggregating individuals’ supply at different wages, will be upward sloping because though at higher wages some individuals may be willing to work less, many more individuals will be attracted to supply more labour.” |