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I believe in economics we assume that firms are rational and because of this a rational firm would not employ additional labor if it caused a decline in the total output of the firm.
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The labor demand curve of a purely competitive seller perfectly elastic?
yes the demand curve is perfectly inelastic and horizontal
What factor will cause the demand curve for labor to shift to the right?
It is something
Is the demand curve for labor upward sloping or downward sloping and why?
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.
How are prices for goods and services determined in a market economy?
Prices and wages are determined by the price mechanism. The price mechanism is the interaction of the demand and supply curve, or the demand and supply model.The answers below are referring to scenarios where there is no government intervention, when the market is a free market, or market economy.You have to draw the model to understand the theory. Prices of goods and services model, on the horizontal axis, or X axis is the quantity of goods; on the vertical axis, or Y axis, you have the prices of goods. You have your two curves: demand and supply. The demand curve is downward sloping, and the supply curve is upward sloping. The interaction of this two curves will result in the shape of the letter: X.There are two issues to consider.When the market is at equilibrium. This is the point where Supply=Demand. Like reading of a graph, the price of the good will be set at this level and the quantity of the good will be set at this amount. Here, the market is stable. On the long run(where factors of production are variable)When the market equilibrium changes due to the changes in demand and supply.When there is an increase in demand, the new demand curve will shift leftward. This will result in a new point where Demand Curve 2 interacts with original Supply Curve. This is the new price and quantity output, where price increases and quantity output increases compared to when the market was stable in Scenario 1.When there is a decrease in demand, the new demand curve will shift rightward. This will result in a new point where Demand Curve 3 interacts with original Supply Curve. This new price and quantity output, where price decreases and quantity output decreases compared to when the market was stable in Scenario 1.When there is an increase in supply, the supply curve will shift rightward. This will result in a new point where Supply Curve 2 interacts with original Demand curve. The price will be lower, and the output will increase compared to Scenario 1 when the market was stable.When there is a decrease in supply, the supply curve will shift leftward. This will result in a new point where Supply Curve 3 interacts with original Demand curve. The price of the good will increase, and the output will decrease compared to Scenario 1 when the market was stable.The above conditions are the same for the labor curve of the total labor work force, but changing the labels of to quantity of labor, and replacing Wages with Price.There are also shortages and surpluses on the short run that can be considered.Most importantly, market will always return to equilibrium on the long run.
What factors determine the demand for labor?
causes a movement along the MRP curve: -wage rate causes a shift of the MRP curve: -price of capital -changes in productivity -changes in the price of the firm's product -demand for the product
The labor demand curve of a purely competitive seller perfectly elastic?
yes the demand curve is perfectly inelastic and horizontal
What factor will cause the demand curve for labor to shift to the right?
It is something
Is the demand curve for labor upward sloping or downward sloping and why?
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.
How are prices for goods and services determined in a market economy?
Prices and wages are determined by the price mechanism. The price mechanism is the interaction of the demand and supply curve, or the demand and supply model.The answers below are referring to scenarios where there is no government intervention, when the market is a free market, or market economy.You have to draw the model to understand the theory. Prices of goods and services model, on the horizontal axis, or X axis is the quantity of goods; on the vertical axis, or Y axis, you have the prices of goods. You have your two curves: demand and supply. The demand curve is downward sloping, and the supply curve is upward sloping. The interaction of this two curves will result in the shape of the letter: X.There are two issues to consider.When the market is at equilibrium. This is the point where Supply=Demand. Like reading of a graph, the price of the good will be set at this level and the quantity of the good will be set at this amount. Here, the market is stable. On the long run(where factors of production are variable)When the market equilibrium changes due to the changes in demand and supply.When there is an increase in demand, the new demand curve will shift leftward. This will result in a new point where Demand Curve 2 interacts with original Supply Curve. This is the new price and quantity output, where price increases and quantity output increases compared to when the market was stable in Scenario 1.When there is a decrease in demand, the new demand curve will shift rightward. This will result in a new point where Demand Curve 3 interacts with original Supply Curve. This new price and quantity output, where price decreases and quantity output decreases compared to when the market was stable in Scenario 1.When there is an increase in supply, the supply curve will shift rightward. This will result in a new point where Supply Curve 2 interacts with original Demand curve. The price will be lower, and the output will increase compared to Scenario 1 when the market was stable.When there is a decrease in supply, the supply curve will shift leftward. This will result in a new point where Supply Curve 3 interacts with original Demand curve. The price of the good will increase, and the output will decrease compared to Scenario 1 when the market was stable.The above conditions are the same for the labor curve of the total labor work force, but changing the labels of to quantity of labor, and replacing Wages with Price.There are also shortages and surpluses on the short run that can be considered.Most importantly, market will always return to equilibrium on the long run.
What factors determine the demand for labor?
causes a movement along the MRP curve: -wage rate causes a shift of the MRP curve: -price of capital -changes in productivity -changes in the price of the firm's product -demand for the product
The labor demand curve is negatively sloped because?
this site has no sense I dont know why you call yourself answer.com
What are some affects to the market supply curve?
cost of labor a change in the demand for the product the number of sellers offering the product
Explain how labor market equilibrium is affected by the supply and demand of labor in a Monopolistic Competition?
The labor market will reach equilibrium as the amount of workers willing to work for a certain price equals the amount of workers employers are willing to hire for that wage. On a supply and demand curve the employees represent the suppl side while the employers represent the demand side
Derive the wage offer curve and supply curve of labor and determine the equilibrium wage under perfect competition in the labor market?
The question doesn't provide any curve, because that's impossible on Answers.com. However it's easy to determine the equilibrium wage in a perfectly competitive market by equating the market demand for labour with the market supply of labour.
Is a firm's demand for labor curve is more elastic in the short run than in the long run?
No. It's more elastic in the long run than the short run.
What does the demand for labor contribute to?
Demand for labor contributes to how much wages should be
What will cause the capital stock when it increases?
Increases in the stock of capital will cause which of the following?The demand of labor increases.The demand of labor decreases.Selected answer No change in the demand of labor.First increase then decrease the demand of labor
