Demand for labour (OCR A-Level Economics): Quizzes

Demand arising from demand for final goods

It depends on demand for the final product

Increases MRP, raising demand

Inverse relationship

Can complement or substitute labour

Firms expand and hire more workers

When labour easily substituted with capital

Higher proportion makes demand more elastic

Long run more elastic than short run

$\text{Total Output} / \text{Workers or Hours Worked}$

$\text{Total Labour Costs} / \text{Total Output}$

$\text{Average Wage} / \text{Labour Productivity}$

Where MRP equals the wage rate

$MPL \times MR$