What can cause the demand curve for labor to shift? Explain.

 The demand curve for labor is the marginal revenue product curve, which is marginal physical product multiplied by marginal revenue. For a perfectly competitive firm, marginal revenue equals price. Whenever the product price changes, the demand curve for labor shifts. Whenever marginal physical product changes due to changes in productivity, the demand curve for labor shifts. The changes in the prices of related factors (substitutes and complements) will also shift demand. The demand for labor is a derived demand, so an increase in the demand for the product produced causes the demand for labor and other variables inputs to change.

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