What Is Demand for Labor?

Labor demand refers to the demand for labor in an enterprise, that is, the increase or decrease in the demand for labor in a certain period of time. ^{[1] The} amount of labor that a company is willing and able to hire at a certain wage rate within a certain period of time is the unity of the company s willingness to pay and its ability to pay, both of which are indispensable.

Labor demand

Assuming other conditions remain the same, labor demand and

1) Demand is inelastic, that is, Ed = 0, no matter how the wage rate changes, the demand for labor is fixed. Line perpendicular to the horizontal axis.

2) Demand has infinite elasticity, that is, Ed = . Means that the wage rate does not change, or that the percentage change is zero, and the absolute value of the percentage change in labor demand is greater than zero. Line with horizontal axis.

3) Unit demand elasticity, that is, Ed = 1. The absolute value of the percentage change in wage rate and the percentage change in demand is equal. A line that is at an angle of 45 degrees to the horizontal axis and is inclined to the lower right.

4) Demand is elastic, that is, Ed> 1. It is a line that slopes downward to the right and is relatively gentle.

5) Demand is inelastic, that is, Ed <1. Is a steeper line sloping down to the right

When an enterprise's production factors such as capital are fixed, the increase in labor input should be in area II, that is, points a ~ b.