A firm's demand for labor depends on, in part, the demand for the firm's product. To summarize this idea, economists say that the demand for labor is:

Question

Quizplus · Accepted Answer

The concept of derived demand means that the demand for a factor of production, such as labor, is derived from the demand for the goods or services produced by that factor. Therefore, the demand for labor is derived demand.

A Firm's Demand for Labor Depends On, in Part, the Demand