Labour Economics

Labour Economics

Table of Contents
Section A.........................................................................................................................................1
Description on how a firm's demand curve is derived in the long run...................................1
Section B..........................................................................................................................................4
Way to measure the labour market and extent to which females in UK face wage
discrimination.........................................................................................................................4
Section C..........................................................................................................................................8
Types of policies need to be introduced for reducing high levels of unemployment.............8
REFERENCES..............................................................................................................................12
.......................................................................................................................................................12

Section A
Description on how a firm's demand curve is derived in the long run
The demand curve of a firm depicts either its short-run costs or long-run costs, which
mainly depends on fixed costs and variables costs. Long run costs are mainly accumulated when
production levels of firms changes over time, with regards to expected profits or losses
economically (Koval, Polyezhayev and Bezkhlibna, 2019). In this regard, within long run of a
firm there is no fixed factors of production, where resources like land, capital goods, labour and
more, all are varied in response to reach long run cost of a firm for producing a particular good
or service. So, long run needs a proper planning as well as implementation stage for firms, to
determine firms’ current market state with projected state, that helps in making decisions for
production (Auer, 2018). Decisions in this regard includes changes within production quantity,
business expansion, entrance or exit from a marketplace, is taken that directly impact on a firm’s
costs. In terms of economics, long run costs in efficient manner can be sustained when outputs of
a firm i.e. result produces in desired quantity of commodity is combines at minimum possible
cost.
Isoquant-isocost analysis
A firm’s main objective is to maximise its profitability at any costs, depends on short-term
and long-term (Murtin and Robin, 2018). In the short run, the total output that firms produce
remains always fixed because of constraint capacity. While if it is a price-taker, i.e. long-term
then price can be changed in order to remain in a competitive market, so, total revenue in such
condition will remain fixed. Thus, the only manner in which profit can be maximised is minimise
the cost as much as possible. Furthermore, supply and demand curve depends on cost of
production, where decision taken by a firm to supply an extra unit is depended on marginal cost
of producing for that unit (Callaghan, 2018). In long run, firm’s decisions depend on two factors
mainly that are – technical relations which shows how output of product vary as per input vary;
and second one is prices of factors like labour costs, interest rates, capital price and more.
therefore, using these two factors, capital and labour can be represented via equal-product curve,
which is also known as isoquant curve (Brown, 2018). This curve traces out the combination of
two yields that yield with same level of output.
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