Is the demand curve for labor upward sloping or downward sloping and why?

Answer 1

Demand curve for labour is downwards sloping. This has a similar reason as to the demand of goods. If labour prices were low, they would be more likely to hire people at this price. However, if prices were high, they may think otherwise.

For example, putting price on the y axis and quantity demanded on the x axis, lets say the equilibrium price for labour wage was $20 per hour. At a price of $50/hour, employers would be reluctant to hire an employee at this price as it is a lot higher than the equilibrium price, and therefore, the quantity demanded would be low. However, if wages were at $5/hour, labour would be considered cheap, and employers would more likely want to hire someone at this cheaper price and hence, quantity demanded will be higher.