Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
It decreases the demand for labor
B
It increases the demand for labor
C
It has no effect on the demand for labor
D
It leads to an increase in wages without affecting labor demand
Understanding the Answer
Let's break down why this is correct
Answer
Derived demand for labor means that the need for workers is based on the demand for the products they create. When the demand for a product increases, companies need to produce more of it, which usually means they need to hire more workers. For example, if a bakery sees a rise in customers wanting bread, it will need to employ more bakers and staff to meet this demand. This increase in hiring can lead to higher wages as businesses compete for available workers, which can improve the overall labor market in that industry. So, in short, when product demand goes up, the demand for labor in that industry also rises, benefiting both workers and companies.
Detailed Explanation
When more people want a product, companies need more workers to make it. Other options are incorrect because Some might think that more demand for a product means less need for workers; It's a common mistake to think that demand for a product doesn't change the need for workers.
Key Concepts
Market equilibrium
Industry demand
Topic
Derived Demand for Labor
Difficulty
medium level question
Cognitive Level
understand
Ready to Master More Topics?
Join thousands of students using Seekh's interactive learning platform to excel in their studies with personalized practice and detailed explanations.