The industry demand curve for labor is the:
A) horizontal sum of individual firm labor demand curves.
B) vertical sum of individual firm demand curves.
C) representative firm's demand curve multiplied by the number of firms.
D) none of the above

Question

Quizplus · Accepted Answer

The industry demand curve for labor is the horizontal sum of individual firm labor demand curves because each firm's hiring decision affects the total amount of labor demanded in the industry. Therefore, the industry demand curve is found by adding up (or horizontally summing) the individual firm demand curves.

The Industry Demand Curve for Labor Is The