We derive the aggregate labor demand curve by horizontally adding all firms'
A)marginal product of labor curves.
B)production function curves.
C)supply curves.
D)horizontal lines at the real wage.

Question

Quizplus · Accepted Answer

The aggregate labor demand curve represents the total amount of labor demanded by all firms in the economy at a given real wage rate. Each firm hires workers until their marginal product of labor (MPL) equals the real wage rate. By horizontally adding all individual firms' MPL curves, we can obtain the aggregate labor demand curve. Therefore, choice A is the correct answer.

We Derive the Aggregate Labor Demand Curve by Horizontally Adding