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[Music] so now Ive determined how the demand and supply of labor determines the equilibrium wage rate in a particularly market so now lets talk about things that can cause a change in the equilibrium wage rate in a particular labor market first lets talk about labor demand you might recall from earlier lessons that there are basically two things that can change the demand for labor remember labor demand is what we call derived demand the demand for labor is derived from the price of the good being produced of course if the price rises it leads to increased demand for labor but if the price falls it leads to a decreased demand for labor why does the demand for labor change when the price of the good being produced changes its because it directly affects the marginal revenue product of labor if baked goods go up in price then the revenue earned by each additional worker employed by bakery increases therefore the demand for labor would increase lets show that on a graph lets say th
