no effect on the market price of furniture. But all furniture-building firms
taken together do have an effect on the equilibrium price of furniture. As
all such firms increase their hiring of carpenters, the total supply of
furniture increases and the equilibrium price of furniture declines. As the
price falls, each firm will reduce its hiring of carpenters, offsetting to some
extent the initial increase in hiring.
The market demand curve for any factor of production is less elastic than what would result
from a simple horizontal summation of all the firms’ demand curves for that factor.