We say that the demand for labor is a derived demand because:

A) labor is a necessary input in the production of every good or service.
B) we demand the product that labor helps produce rather than labor service per se.
C) the forces of supply and demand do not apply directly to labor markets.
D) labor is hired using the MRP = MRC rule.

Derived Demand

Demand for a factor of production or intermediate good that occurs as a result of the demand for another related final good or service.

MRP = MRC Rule

The principle that to maximize profit (or minimize losses), a firm should employ the quantity of a resource at which its marginal revenue product (MRP) is equal to its marginal resource cost (MRC), the latter being the wage rate in a purely competitive labor market.