The most crucial part of the market economy is the labour market which is made of up two equally important parts: demand and supply. The labour market is just like any other part of the market economy where the employees �sell� their labour and the employers �buy� their labour from employees. Both the demand and supply of labour are influenced by different factors. The supply of labour is influenced by the pay or remuneration for the workers, the working conditions, human capital, skills, experience and training of the employees, the occupational and geographical mobility of labour as well as the participation rate whereas the factors that influence the demand for labour would include the output of the firm, productivity of labour and the costs of other outputs like the cost of capital goods. The output of the firm will depend on the demand part of the labour market as the amount of sales a firm is conducting would influence how much labour they employ. If the firm is experiencing higher sales, demand for their good/service increases, causing the firm to hire more people to make t....

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