Concept: Wages are determined by the market forces of labour demand and labour supply.
Explanation:In a labour market, wages are not fixed by the government or the economy alone.
Employers demand labour, while workers supply labour.
The wage rate is determined where the quantity of labour demanded equals the quantity of labour supplied.
This point is known as the equilibrium wage rate.
Labour unions and laws may influence wages, but the main determinant is the interaction between demand and supply of labour.
Answer: Interaction between demand and supply of labour.