1. Law of supply and demand are theories that explain the behavior of the sellers to supply and the willingness of customers to buy with the accordance with the price at a given period of time.
- Law of demand states that price and demand of the customers to certain product have a inversely proportional relationship where if the price increases, the demand for the product will decrease and if the price decreases then the demand for it will increase.
- Law of supply states that the price of a product and the behavior of sellers to supply have a directly proportional relationship where if the price increases, the supply will also increase while if the price decreases then the supply will also decrease.
2. * Labor force is also called workforce. It is the total numbers of people who are employed and unemployed but still seeking and willing to have a job. It doesn't count people who are unemployed whose not willing and not capable to work.
Equation :
LABOR FORCE = EMPLOYED + UNEMPLOYED BUT WILLING AND LOOKING FOR A JOB)
* Labor demand is the amount of labor that an employer wants to hire at a given wage rate.
*Labor supply is the number of hours of work that laborers are willing and able to supply at given wage rate.
3. Labor shortage is a situation where the labor demand can't be satisfied by the available labor supply.
Mathematical representation :
Labor demand > Labor Supply
1. Law of supply and demand are two theories that describe and explain the relationship of different components of the market, specifically, the demand, supply and price.
*Law of supply states: If the price of a product increases, the supply will also increase and when the price decreases,the supply will also decrease. Based on the statement, we can conclude that supply and price have a directly proportional relationship.
*Law of demand states: If the price of a product increases, the demand for the product will decrease and when the price decreases, the demand for it will increase. Based on the statement, it suggests that the price and demand have inversely proportional relationship.
2. * Labor force ,also called workforce, is the cumulative numbers of people who are available, willing to work ,currently looking for a job and already have. It doesn't include people who are unemployed and not looking for a job. In mathematical equation,
Labor Force= Employed + Unemployed but willing and currently looking for a job
* Labor demand represents the numbers that an employer seek to hire in a given period of time at a certain rate. Labor is one of the necessary components to produce a product or service so employers demands labor.
*Labor supply represents the hours of work that employees are willing and able to supply at a given wage rate.
3. Labor shortage is a situation or phenomena where labor demand is too high and the labor supply can't satisfy that demand while labor