Answer to Question #223188 in Microeconomics for bobie

Question

Describe and give some explanations about 2 factors that would cause most companies' labor demand to move, as well as how this would influence equilibrium wages and the value of labor's marginal product.

Answer 1

Change in product's quantity demanded which the labor produces tends to cause a shift in labor demand. When the quantity demanded increases, this will make the company to look for more labor hence a shift in labor demand.

Change in production process which utilizes less labor. For instance, when technology is introduced in a certain Field, this will call for a reduction of labour within the specified area in the company.