Labour as a Derived Demand
Labour as a Derived Demand
The demand for labour is a derived demand because firms hire workers for the output they produce, not for the sake of employing them. Demand for workers therefore depends on demand for the final good or service.
Step-by-step lessons covering AQA A Level Economics 1.6.1 The demand for labour, marginal productivity theory for A Level Economics. Each lesson works through exam-style questions in Paper 1, Paper 2 and Paper 3 format. Start with the core supply-and-demand models before moving on to the more evaluation-heavy macroeconomic policy topics.