Figure 19-1 -Refer to Figure 19-1. Suppose the Local Labor Market Was

Multiple Choice

Figure 19-1
-Refer to Figure 19-1. Suppose the local labor market was in equilibrium to begin with but then the largest local employer decided to change its compensation scheme to $8 as shown. Which of the following compensation schemes could the graph be illustrating?

A) An efficiency wage.
B) Discrimination.
C) A compensating differential.
D) The superstar phenomenon.