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according to David Ricardo in “The Iron Law of Wages,” what factors contribute to the determination...

according to David Ricardo in “The Iron Law of Wages,” what factors contribute to the determination of the price of labor (wages)? What happens when the price of labor is lower than it’s “natural price”?

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Answer #1

Ricardo tells that market prices of workers or actual wages is greater than natural wages. Resistance to economic trends is the reason for that. The factors contribute to the determination of the price of labour below:

  • Ability to pay
  • Supply and demand
  • Market rate prevailing
  • Living cost
  • Trade union's bargaining
  • Productivity
  • Regulations of government
  • Training cost

Price of labour is lower than n it's normal price is : It leads to workers condition is very pathetic.It produces proverty.

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