In a competitive labour market, an increase in the demand for labour might be due to an increase in the
A) supply of the other factors.
B) demand for the product that labour produces.
C) wage rate.
D) supply of labour.
E) supply of the product that labour produces.

Question

Quizplus · Accepted Answer

An increase in the demand for the product that labour produces will lead to an increase in the demand for labour, as firms will need to hire more workers to produce the increased quantity of goods or services. This increased demand for labour will also put upward pressure on wages, as firms compete for a limited pool of available workers. Therefore, B is the best choice. A, C, D, and E are not correct as they do not directly relate to an increase in labour demand.

In a Competitive Labour Market, an Increase in the Demand