Why is the demand for labor called a "derived demand."?
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The demand for labor is called a derived demand because the demand for labor comes from the demand for goods produced by labor.
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The demand for labor s called derived demand since t s derived from the demand for the firm's output. If demand for the firm's output increases, the firm will demand more labor and they will eventually hire more workers. That is why it is referred to as derived demand.
Explanation:
- The term derived demand was provided by Alfred Marshall. Derived demand is referred to as the demand for a factor of production or labor that occurs as a result of the demand for another intermediate or final good.
- When the demand for the product increases from the consumers then the demand for factor of production also goes up.
- Hence the demand by a firm is dependent on the demand by consumers for the product produced by the firm.
To know more about Alfred Marshall
What is economics according to Alfred marshal??
https://brainly.in/question/11606516
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