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in this short video we will look at the supply for labor in an economy and the demand for labor in an economy there are two key points to remember about the supply of labor and the demand for labor first firms in the economy are the economic agents that are demanding labor and second you and I are the economic agents supplying the labor in the economy before starting on the demand for labor by firms lets take a minute to review the structure of our graph the horizontal line or the back and forth line represents the quantity of labor as with other demand graphs the amount of labor increases as the viewer moves from left to right the vertical axis represents the real wage rate remember that the word real tells us that the wage rate has been adjusted for prices so we are measuring the wage rate that allows the workers to buy what they want as with other demand graphs the real wage rate which is essentially a price increases as the viewer moves up the access now lets spend a minute and