ABSTRACT
The lectures on marginal cost, production functions, and technology have many implications about the demand for factors of production. A firm hires more of factors costing less than the revenue they add, and less of costing more until the equilibrium condition in equation is satisfied for all factors. An important cause of differences between derived demand curves for an economy and for a firm or industry is the difference in the supply conditions of other factors. The lower elasticities of factor supply to an economy make the derived demand curve for a particular factor by an economy less elastic than those by single firms or industries. The system of equilibrium conditions in the factor and product markets would usually be sufficient to determine a unique set of factor and product prices for any number of factors and products. Derived demand curves are negatively inclined, although in a rather extreme form, even with fixed proportions and only one industry.
