Microeconomics › Section D · Labor and financial markets › Topic D.1
Demand and supply in labor markets
Nobody hires for the fun of it: firms demand labour because workers help produce what customers want, and workers supply it because wages buy what they want. The demand-supply model runs in the labour market exactly as in goods markets - with the roles reversed.
In this topic
- The same model, roles reversed
- Demand for labour is derived demand
- What shifts labour demand
- What shifts labour supply
- Equilibrium and its two failure modes
- Worked example: a childcare labour market
- Worked example: technology and wages
- The minimum wage in practice
- There is no single labour market
- Common mistakes to avoid
- Key takeaways
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