The firms who sold goods and services in the unit on supply and demand now become the buyers in the labor market. Firms need workers to make products, design those products, package them, sell them, advertise for them, ship them, and distribute them, among other tasks. No worker will do this for free, and so firms must enter into the labor market and buy labor. Firms determine the amount of labor that they demand according to several considerations: how much the labor will cost (as represented by the market wage), and how much they feel they need, much in the way that buyers in the goods and services market buy according to the market price and their own needs.
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