labor demand

In light of the limits that have been placed on this answer I will only focus my comments on the demand for labor and on the other hand the supply of labor. First the demand for labor. This is to me by far the most interesting aspect of the course. Labor demand is derived from the firms desire to maximize profits. This is a basic assumption of labor demand. Will the firms continually try to …

…the firms in that market have to compete more ferociously for labor and since demand for their product is high they are willing to pay more to attract employees. What is interesting in my mindis that the obvious thing happens it is to hard for all the people that left one market to come back so they stay where they are until the cost for tranfering is lower than their perceived reward for switching markets.