All Perfectly Competitive Fast-Food Firms Are Hiring the Profit-Maximizing Quantity

Multiple Choice

All perfectly competitive fast-food firms are hiring the profit-maximizing quantity of labor and are paying their workers $7 per hour.If the government raises the minimum wage to $8 per hour:

A) the value of the marginal product will exceed the wage,and firms will hire more workers.
B) the value of the marginal product will be less than the wage,and firms will lay off some workers.
C) firms will increase their prices to keep the value of the marginal product equal to the wage.
D) firms will have to exit the industry since the value of the marginal product is always less than the wage.