Given a 10 Percent Decrease in Wages, Firm a Hires

Multiple Choice

Given a 10 percent decrease in wages, firm A hires more labor than firm B. It follows that, ceteris paribus ,

A) the elasticity of demand for the product that firm A produces is likely lower than the elasticity of demand for the product that firm B produces.
B) firm A likely has a lower labor cost-total cost ratio than firm B.
C) firm A likely has more substitutes for labor than firm B.
D) firm A likely has higher per-unit costs than firm B.