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 labor we delight in physics pain.”
—William Shakespeare (1564–1616)
“Unless democracy is to commit suicide by consenting to its own destruction, it will have to find some formidable answer to those who come to it saying: “I demand from you in the name of your principles the rights which I shall deny to you later in the name of my principles.””
—Walter Lippmann (1889–1974)