in a competitive labour market, the demand curve for labour is derived from
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Firms demand labor from workers in exchange for wages. The firm's demand for labor. The firm's demand for labor is a derived demand; it is derived from the demand for the firm's output. If demand for the firm's output increases, the firm will demand more labor and will hire more workers.
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Image result for in a competitive labour market, the demand curve for labour is derived from .
Thus, at OW wage rate, OL amount of labour is demanded by the firm. If wage rate is OW1, the firm will hire OL1 units of labour, and it will demand OL2 units of labour if wage rate is reduced to OW2. Thus, VMPL = MRPL curve can be thought of as the demand curve for labour under perfect competition.
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