In a Perfectly Competitive Industry, Do Higher Wages for Labor

Multiple Choice

In a perfectly competitive industry, do higher wages for labor union members diminish profits?

A) Yes, in the short run, but not in the long run in which some firms exit the industry because of higher costs.
B) Yes, in the long run, but not in the short run because profits are always fixed in the short run.
C) No, higher wage costs can affect profits only if they affect labor productivity and this doesn't happen.
D) No, because higher labor costs usually bring more firms into the industry and this effect dampens price rises.