Labor supply and demand refers to the relationship between the number of workers available to work and the number of jobs that employers need to fill. When there are more job openings than available workers, demand for labor is high, often leading to higher wages. Conversely, if there are more workers than jobs, the supply of labor exceeds demand, which can result in lower wages and higher unemployment rates. Factors influencing labor supply include education, skills, and population demographics, while labor demand is affected by business growth, technological advancements, and economic conditions. Understanding this balance helps policymakers and businesses make informed decisions about hiring and workforce development.