A Firm's Demand for Labor Depends On, in Part, the Demand

question 31

Multiple Choice

A firm's demand for labor depends on, in part, the demand for the firm's product. To summarize this idea, economists say that the demand for labor is:

• A) derived demand.
• B) marginal demand.
• C) secondary demand.
• D) monopsonistic demand.

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Definitions:

Contribution Margin

The amount by which a product's sales price exceeds its variable costs, indicating how much it contributes to covering fixed costs and generating profit.

Cost Volume Profit Analysis

A method used to determine how changes in costs and volume affect a company's operating income and net income.

Long-Run Decision Making

Strategic decisions focused on long-term goals and considerations, typically involving investments in capacity or capabilities that affect a firm's structure.

Short-Run Decision Making

The process of making business decisions that are immediate or temporary, focusing on situations that do not alter the fixed costs.