The demand curve for labor exhibits the connection between the wage fee and the amount of labor demanded. It’s downward sloping, which means that because the wage fee will increase, the amount of labor demanded decreases. It is because employers are much less prepared to rent staff at greater wages.
The marginal product of labor is the extra output produced by hiring yet another employee. The demand curve for labor could be derived from the marginal product of labor by discovering the wage fee at which the marginal product of labor is the same as the wage fee. At this level, the employer is maximizing their revenue, as they’re paying the bottom attainable wage fee for the given stage of output.
