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How to Match Labor Demand & Supply ?

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Question added by AHMED IMRUL KAYES , Senior Consultant , HR Bangladesh Ltd.
Date Posted: 2015/01/29
Kathy Mustafa
by Kathy Mustafa , Personal Assistant to CEO- Managing Sales and Marketing Departments , Saudi Kinda Real Estate

The demand and supply of labor are determined in the labor market. The participants in the labor market are workers and firms. Workers supply labor to firms in exchange for wages. Firms demand labor from workers in exchange for wages.

The firm's demand for labor. The firm's demand for labor is a derived demand; it is derived from the demand for the firm's output. If demand for the firm's output increases, the firm will demand more labor and will hire more workers. If demand for the firm's output falls, the firm will demand less labor and will reduce its work force.

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