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Firm a Has a Higher Labor Cost-Total Cost Ratio Than

Question 88

Multiple Choice

Firm A has a higher labor cost-total cost ratio than Firm B. If both firms employ the same type of labor, and the wage rate rises by $1, then Firm A's product price will most likely ____________ than Firm B's product price.


A) rise by more
B) fall by more
C) fall by less
D) rise by less

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