The demand curve for labor shows the relationship between the wage rate and the quantity of labor demanded. It is downward sloping, meaning that as the wage rate increases, the quantity of labor demanded decreases. This is because employers are less willing to hire workers at higher wages.
The marginal product of labor is the additional output produced by hiring one more worker. The demand curve for labor can be derived from the marginal product of labor by finding the wage rate at which the marginal product of labor is equal to the wage rate. At this point, the employer is maximizing their profit, as they are paying the lowest possible wage rate for the given level of output.
