Economics (AS & A Level) · Oct / Nov 2025 · Paper 34 · Question 14

The diagram represents the demand and supply of labour in a competitive industry. What is true about unit of labour L when they are paid wage W?

1. AL is paid only economic rent.
2. BL is paid an element of economic rent and transfer earnings.
3. CL is paid below transfer earnings and leaves the industry.
4. DL is paid exactly transfer earnings and remains in work.

As printed in the paper