Final Answer:
The total wage cost curve is horizontal if the wage rate is fixed at a certain level.
Step-by-step explanation:
The total wage cost is calculated by multiplying the number of labor units employed by the wage rate. When the wage rate is fixed, any change in the number of labor units does not affect the total wage cost. Therefore, the total wage cost curve becomes a horizontal line at the fixed wage rate.
In this scenario, changes in the quantity of labor don’t impact the cost because the wage rate remains constant. If the wage rate were to increase or decrease, the total wage cost curve would shift upward or downward accordingly. However, with a fixed wage rate, regardless of how many labor units are employed, the total wage cost remains constant.
This situation is theoretical and assumes perfect conditions such as constant wage rates and perfect competition in the labor market. In the real world, wage rates fluctuate due to various factors like labor supply and demand, changes in economic conditions, and government policies. But when analyzing the theoretical concept of fixed wage rates, the total wage cost curve becomes a horizontal line, illustrating that the total cost of labor remains unchanged despite variations in labor quantity.