Learning Path
Question & Answer1
Understand Question2
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Explore TopicChoose the Best Answer
A
True
B
False
Understanding the Answer
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Answer
The demand for labor in a firm is actually influenced by how much of a product consumers want to buy, which is known as derived demand. This means that if more people want a product, the firm needs more workers to produce it. For example, if a toy company sees a big increase in demand for its toys during the holiday season, it will likely need to hire more workers to keep up with that demand. So, the need for labor is not just about the company’s current workforce but is closely tied to how well the products are selling in the market. In short, the demand for labor comes from the demand for the goods and services that workers help to create.
Detailed Explanation
The need for workers depends on how much of a product people want to buy. Other options are incorrect because Some might think that a firm only looks at its own needs.
Key Concepts
Derived Demand for Labor
Product Demand
Labor Market Dynamics
Topic
Derived Demand for Labor
Difficulty
easy level question
Cognitive Level
understand
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