Labor Demand
The consumers of the labor market are firms. The demand for labor services is a derived demand, derived from the supply and demand for the firm's products in the goods market. It is assumed that a firm's objective is to maximize profit given the demand for its products, and given the production technology that is available to it.
Some notation:
Let be price level of commodities Let be nominal wage Let be real wage (w/p) Let be profit of firms Let be labor demand Let be the firms output of commodities that it will supply to the goods market.Read more about this topic: Classical General Equilibrium Model
Famous quotes containing the words labor and/or demand:
“The poor, stupid, free American citizen! Free to starve, free to tramp the highways of this great country, he enjoys universal suffrage, and by that right, he has forged chains around his limbs. The reward that he receives is stringent labor laws prohibiting the right of boycott, of picketing, of everything, except the right to be robbed of the fruits of his labor.”
—Emma Goldman (1869–1940)
“Our frigate takes fire,
The other asks if we demand quarter?
If our colors are struck and the fighting done?
Now I laugh content for I hear the voice of my little captain,
We have not struck, he composedly cries, we have just begun our part of the fighting.”
—Walt Whitman (1819–1892)