Factors affecting demand for labour

So far I have put this:

• Quantity demanded of the good that is produced by a firm: As demand for labour is a derived demand, fluctuations in the quantity demanded of the good that the employer is producing will indeed have effects on the demand for workers to produce that good.
• The price of other factors of production: Assume steel (capital) prices go up. Bridge building firms could induce this increased cost on the consumers; however this could cause the above point of reducing the quantity demanded and hence affecting revenue. Therefore, the firms could employ less builders.

Anymore points will be greatly appreciated! :smile:

Reply 1

suneilr

3

The physical productivity of the workers - If workers are more productive employers will be prepared to employ more people.

The price of the product changes - If the price of a product increases, employers are prepared to hire more workers.

Time period - In a longer time period, firms can vary the amount of capital and substitute labour for other cheaper factors of production.

Reply 2

Tee07

3

1.The Price of the Firm’s Output

The higher the price of a firm’s output, the greater is the firm’s demand for labour. The price of output affects the demand for labour through its influence on the value of marginal product of labour. If the price of the firm’s output increases, the demand for labour increases and the demand for labour curve shifts rightward.

2.Technology

New technologies decrease the demand for some types of labour and increase the demand for other types. For example, if a new automated bread-making machine becomes available, a bakery might install one of these machines and fire most of its workforce—a decrease in the demand for bakery workers. But the firms that manufacture and service automated breadmaking machines hire more labour, so there is an increase in the demand for this type of labour

3.The Price of Other Factors of Production

If the price of using capital decreases relative to the wage rate, a firm substitutes capital for labour and increases the quantity of capital it uses. Usually, the demand for labour will decrease when the price of using capital falls.

Seasonality lads

thats under derived demand yea?

Reply 5

EC

18

This post is 9 years old. Mind blown.

Posted from TSR Mobile

Reply 6

YOUNISS KWENAH

List five factor influencing the demand of labour

Reply 7

pmc:producer

20

Original post by suneilr

The physical productivity of the workers - If workers are more productive employers will be prepared to employ more people.

The price of the product changes - If the price of a product increases, employers are prepared to hire more workers.

Time period - In a longer time period, firms can vary the amount of capital and substitute labour for other cheaper factors of production.

If workers are more productive, people will hire more? Yes, if all other variables favour increased output - if they don't, this is nonsense.

If the price rises by an amount consumers are unwilling to pay, consumption demand overall will fall meaning no new workers are required.

Time period would need to be combined with new technology and the like to have any real, sustainable influence on labour demand.

All in all, poor answers.

Reply 8

Johen

1

The fact that a firm’s demand curve for labour is given by the downward-sloping portion of its marginal revenue product of labour curve provides a guide to the factors that will shift the curve. In perfect competition, marginal revenue product equals the marginal product of labour times the price of the good that the labour is involved in producing; anything that changes either of those two variables will shift the curve.

Factors affecting demand for labour

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