Glossary · Micro · Factor markets

Labor demand

How many workers firms want to hire at each wage. A firm keeps hiring while the next worker’s marginal revenue product exceeds the wage, so the labor demand curve is the downward-sloping MRP curve.

Also called: demand for labor

Watch it happen step by stepTaught in: The Firm's Hiring Decision

Related terms

Marginal revenue product (MRP)Labor supplyDerived demand

More from factor markets

Backward-bending labor supplyEquilibrium wageMarginal factor cost (MFC)Minimum wageMonopsony

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