Demand for labour depends on the following factors EXCEPT

Analyze the question: We need the one option that is NOT a factor affecting the demand for labour.

Concept: Labour demand is a derived demand. Firms hire workers because of the goods and services those workers help produce. So demand for labour depends on:

• Demand for the final product and its price. If consumers want more of the product, firms need more workers. This is option D.
• Price of labour (the wage rate). Higher wages usually reduce the quantity of labour demanded. This is option C.
• Number and nature of industries or enterprises. More firms mean more demand for labour, and labour-intensive industries need more workers than capital-intensive ones. These are options A and B.
• Productivity of labour and the cost of substitutes such as capital or machines.

Check each option:

• A. Number of industries/enterprises: more firms means more demand for labour. This is a factor.
• B. Nature of industries: labour-intensive or capital-intensive production affects how many workers are needed. This is a factor.
• C. Price of labour: wages affect how many workers firms will hire. This is a factor.
• D. Demand for labour output and prices: this is the classic derived-demand factor. This is a factor.
• E. The period of training: this affects the supply of labour, because longer training means fewer qualified workers available in the short run. It is not a determinant of the firm's demand for labour.

Answer: E, the period of training, is the exception.

Exam tip: Sort determinants into two groups. Demand factors are about the employer: product demand, wages, productivity, and the number and type of firms. Supply factors are about workers: training period, population, mobility, and working conditions. If an option describes workers' qualification or preparation, it is usually a supply-side factor.