Labour demand is considered a derived demand because producers do not demand labour for itself but only because labour is used to produce output that consumers desire.

Question

Quizplus · Accepted Answer

Labour is considered a derived demand because it is not demanded for its own sake, but because it is necessary for the production of goods and services that consumers want to buy. In other words, the demand for labour is derived from the demand for the goods and services produced by that labour.

Labour Demand Is Considered a Derived Demand Because Producers Do