In Firm X Labor Costs Are 85 Percent of Production

Multiple Choice

In firm X labor costs are 85 percent of production costs, while in firm Y labor costs are 40 percent of production costs. A 20 percent increase in wages would increase production costs by

A) 23 percent in firm X and 20 percent in firm Y.
B) 19 percent in firm X and 15 percent in firm Y.
C) 15 percent in firm X and 6 percent in firm Y.
D) 17 percent in firm X and 8 percent in firm Y.