Firm's Labor Demand

A firm's labor demand refers to the number of workers a company wants to hire based on its production needs. This demand is influenced by several factors, including the overall economic conditions, the level of consumer demand for its products, and the wage rate. When a company expects to sell more goods, it may need to hire more workers to produce those goods. Conversely, if sales decrease or wages rise significantly, the firm may reduce its workforce. Essentially, labor demand reflects how businesses adjust their hiring based on their operational and financial circumstances.