Excess Supply

And finance Allah shmoop What is derived Factor Demand All

right people We all know our basic supply and demand

curve right The supply curve slopes upward reflecting that firms

will want to make mohr things the more they can

sell them for and the demand curve slopes downwards showing

the consumers want to buy more things that cheaper They

Khun get him That's the consumer marketplace right there Derived

factor Demand is am or less the same but just

the opposite Derived factor Demand is the demand by firms

for factors of production to make products which is dependent

on consumer demand for those products derived factor Demand takes

the supply and demand curves down the rabbit hole flipping

everything upside down Well where are we not in Wonderland

here and not in the consumer market either All right

now we're in the labor market There we go In

the labor market the people who were demanding are now

supplying and the firms that were supplying are now dim

ending at little topsy turvy There Here people are supplying

their labour which means in the labor market workers own

the upward sloping supply curve like in order for consumers

to make money to buy all that stuff in the

consumer market Most of them have to sell their labor

right Justus The buyers air now sellers The sellers are

now buyers Firms which sell things on the consumer market

need toe by labor to help them make those things

that they're selling in the labor market Firms owned the

downward sloping demand curve that is the derived in derived

fact or demand is because the demand for one thing

creates the demand for the other like in the labor

market The demand for goods in the consumer market creates

the demand for workers to make that stuff in the

labor market well the labor demand was derived from the

market demand Yeah curious er and curious er So what's

the factor in factor demand Well derived factor Demand applies

to the labor market but also to all inputs in

general For firms factors of production are the inputs they

need to make the stuff they're selling And one of

those things that they're selling includes labor just like consumers

have The consumer market firms have their factor market the

main factors of production that firms need to make things

while things like the land and labor and capital in

raw materials and intelligence demand for flower in the factor

market is in part derived from the demand of qassem

in the consumer market the firm demand for battery engineers

well it's derived from consumer demand for longer lasting batteries

and or cars that don't run on Dead Dinosaur Group

because having your phone die or your car at the

worst time is well the worst demand for rubber on

the rise by firms during the baby boom era Yeah

you bet Maybe because the increase in supply babies led

to an increase in the demand for rubber duckies and

or toys that bounced which increased factor demand for rubber

Well maybe firms were making something else with the rubber 00:02:58.325 --> [endTime] Who knew Shmoop