The demand curve for labor slopes downward because:

Question

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The demand curve for labor slopes downward due to the diminishing marginal product of labor. As more and more workers are hired, the additional output that each new worker adds begins to decrease, meaning each new worker contributes less to total output than the previous worker. As a result, the employer is willing to pay less for each additional unit of labor, leading to a downward-sloping demand curve. Choice A is not accurate as there are always workers who are willing to work even at low wages, although the quantity may be lower. Choice B is not accurate as it explains substitution of capital with labour and not the downward slope of labour demand curve.

The Demand Curve for Labor Slopes Downward Because