As in the case of ordinary demand curves, it is important to distinguish between movements along a factor demand curve and shifts of a labor demand curve. Three causes of shifts of a labor demand curve are changes in demand for your product, changes in the price of capital, and changes in _____.

Question

Quizplus · Accepted Answer

Changes in productivity due to changes in technology can lead to a shift in the labor demand curve as firms may require more or fewer workers to produce the same level of output. Changes in production levels or wages would lead to movements along the demand curve and changes in opportunity costs are not directly related to shifts in the labor demand curve.

As in the Case of Ordinary Demand Curves, It Is