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3.5 Labour market
3.5.1 Demand for labour
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Created by
Molly Norman
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Cards (4)
What is the labour market composed of?
Sellers of labour (
households
)
Buyers of labour (
firms
)
Workers supply their labour & firms demand their labour.
What is the demand for labour?
Derived
demand.
It depends on the demand for goods/services.
If demand for goods/services increases then the demand for
labour
will
increase.
What factors influence the demand for labour?
The
price
of the
product
being produced
The
demand
for the final product
The ability to substitute
capital
(machinery) for labour
The
productivity
of labour
What is marginal revenue product of labour?
The extra
revenue
generated when an additional
worker
is
employed.