492:, has two conflicting effects: more expensive capital induces the firm to substitute away from physical capital usage and into more labor usage, contingent on any particular level of output; but the higher capital cost also induces the firm to produce less output, requiring less usage of both inputs. Depending on which effect predominates, labor demand could be either increasing or decreasing in
919:
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328:
specifying the amount of output that can be produced using any of various combinations of quantities of labor and capital. This optimization problem involves simultaneously choosing the levels of labor, capital, and output. The resulting labor demand, capital demand, and output supply functions are
1168:) is the market labor supply function of workers which faces the firm. Here the firm cannot choose an amount of labor to demand independently of the wage rate, because the labor supply function links the quantity of labor that can be hired to the wage rate; therefore
769:) is the market demand function for the product. The constraint equates the amount that can be sold to the amount produced. Here labor demand, capital demand, and the selling price are the choice variables, giving rise to the input demand functions
1073:
674:
218:
581:, its long-run optimization problem is different because it cannot take its selling price as given: the more it produces, the lower will be the price it can obtain for each unit of output, according to the market
47:, the market-determined selling price of its output, etc. The function specifying the quantity of labor that would be demanded at any of various possible values of these exogenous variables is called the
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in the labor market — meaning that it is the only buyer of labor, so the amount it demands influences the wage rate — then its long-run optimization problem is
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makes it worthwhile to produce more output and to hire additional units of input in order to do so), and a decreasing function of
898:
There is no output supply function for a monopolist, because a supply function pre-supposes the existence of an exogenous price.
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488:(since more expensive labor makes it worthwhile to hire less labor and produce less output). The rental rate of capital,
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1068:{\displaystyle {\text{Maximize}}\,\,pQ-wL(w)-rK\,\,{\text{with respect to}}\,\,Q,\,w,\,{\text{and}}\,K}
35:
of an employer is the number of labor-hours that the employer is willing to hire based on the various
669:{\displaystyle {\text{Maximize}}\,\,pQ(p)-wL-rK\,\,{\text{with respect to}}\,L,\,K,\,{\text{and}}\,p}
499:
The short-run labor demand function is the result of the same optimization except that capital usage
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213:{\displaystyle {\text{Maximize}}\,\,pQ-wL-rK\,\,{\text{with respect to}}\,\,Q,\,L,\,{\text{and}}\,K}
1208:
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36:
51:. The sum of the labor-hours demanded by all employers in total is the market demand for labor.
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is the number of hours of machinery used (the quantity of capital demanded) per month, and
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The short-run labor demand function is derived the same way except with physical capital
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is exogenously given by past physical investment rather than being a choice variable.
476:
Ordinarily labor demand will be an increasing function of the product's selling price
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is the number of labor hours hired (the quantity of labor demanded) per month,
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28:
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is the cost of using a machine (capital) for an hour (the "rental rate"),
126:
1175:
The short-run optimization is the same except that physical capital
979:
If the firm is a perfect competitor in the goods market but is a
39:(externally determined) variables it is faced with, such as the
912:
510:
58:
304:
is the chosen quantity of output to be produced per month,
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for the product. So its profit-maximization problem is
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is the exogenous selling price of the produced output,
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1234:, 3rd Ed., W.W. Norton & Company, Inc. New York.
1179:is exogenous rather than being a choice variable.
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308:is the hourly wage rate paid to a worker,
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1093:{\displaystyle {\text{subject to}}}
694:{\displaystyle {\text{subject to}}}
238:{\displaystyle {\text{subject to}}}
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1199:Neoclassical micro-economic model
1170:there is no labor demand function
917:
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909:Monopsonist in the labor market
133:is determined by the following
1150:{\displaystyle Q=f\,(L(w),K),}
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751:{\displaystyle Q(p)=f\,(L,K),}
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286:{\displaystyle Q=f\,(L,K),}
129:labor demand function of a
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1194:Conditional factor demands
854:and the pricing function
466:{\displaystyle Q(p,w,r).}
416:{\displaystyle K(p,w,r),}
369:{\displaystyle L(p,w,r),}
888:{\displaystyle p(w,r).}
844:{\displaystyle K(w,r),}
803:{\displaystyle L(w,r),}
1232:Microeconomic Analysis
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49:labor demand function
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329:of the general form
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87:improve this section
1209:Personnel selection
326:production function
135:profit maximization
43:, the unit cost of
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55:Perfect competitor
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16:(Redirected from
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18:Demand for labor
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1189:Factor market
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926:This section
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1204:Wage slavery
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939:Please help
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583:demand curve
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537:Please help
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85:Please help
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33:labor demand
32:
26:
1228:Varian, Hal
981:monopsonist
1215:References
1087:subject to
957:April 2020
688:subject to
579:monopolist
555:April 2020
507:Monopolist
232:subject to
103:April 2020
1025:−
1007:−
928:does not
627:−
618:−
526:does not
170:−
161:−
137:problem:
74:does not
41:wage rate
37:exogenous
29:economics
1245:Category
1230:, 1992,
1183:See also
995:Maximize
597:Maximize
149:Maximize
127:long-run
949:removed
934:sources
547:removed
532:sources
324:is the
95:removed
80:sources
45:capital
1160:where
761:where
296:where
31:, the
932:any
930:cite
530:any
528:cite
426:and
125:The
78:any
76:cite
1058:and
943:by
659:and
541:by
203:and
89:by
27:In
1247::
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