Changes in Factor Demand
Shifters of Factor Demand
Changes in Factor Supply
Labor Supply Shifters
Graphical Analysis: Demand Shift
Increase in labor demand → higher wage and more workers hired
Graphical Analysis: Supply Shift
Increase in labor supply → lower wage but more workers employed
Factor Markets for Land and Capital
Land
Capital
Least-Cost Rule and Profit-Maximizing Rule
Least-Cost Combination of Resources
Profit-Maximizing Combination
AP Exam Tips
Common Mistakes