Demand for Labour (AQA A-Level Economics): Flashcards

Markets where factor of production services are bought and sold

Demand exists only due to demand for final goods/services

Additional output from employing one extra worker

Money value of output added by one extra worker

$MRP_L = MPP_L \times MR$

$MPP_L$ falls as more workers added to fixed capital

The $MRP_L$ curve

$MRP_L =$ Wage rate

% change in labour quantity / % change in wage rate

Labour costs are small proportion of total production costs