The demand curve for labor exhibits the connection between the wage charge and the amount of labor demanded. It’s downward sloping, which means that because the wage charge will increase, the amount of labor demanded decreases. It is because employers are much less keen to rent employees at greater wages.
The marginal product of labor is the extra output produced by hiring yet another employee. The demand curve for labor may be derived from the marginal product of labor by discovering the wage charge at which the marginal product of labor is the same as the wage charge. At this level, the employer is maximizing their revenue, as they’re paying the bottom potential wage charge for the given stage of output.
