labor demand
In light of the limits that have been placed on this answer I will only focus my comments on the demand for labor and on the other hand the supply of labor. First the demand for labor. This is to me by far the most interesting aspect of the course. Labor demand is derived from the firms desire to maximize profits. This is a basic assumption of labor demand. Will the firms continually try to make changes that will improve the profitability of the firm? We assume that yes they will. Firms are basically price takers. Now their main decision is what quantity of their product to produce. This is because as they hire more people they basically increase output so the decision hire more people and the decision to produce more are basically the same decision. The optimal output will equate marginal revenue with marginal cost. Marginal revenue is the product price in a purely competitive market. Marginal cost is therefore the cost to produce that unit. MPl is the change in output of the firm. What happens when a firm decides to produce more? They must hire more labor assuming that capital remains constant. If a firm could continuously hire more peole and increase t
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Some common words found in the essay are:
, labor demand, marginal revenue, marginal revenue product, hire people, revenue product, demand labor, supply labor, willing pay, marginal cost, produce hire, marginal expense,
Approximate Word count = 795
Approximate Pages = 3 (250 words per page double spaced)
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