Multiple Choice
Suppose that firms are paying their "efficiency wage" rate and AD shifts leftward.Firms that lower wages and maintain production would
A) achieve lower profits since worker efficiency would fall and total wages paid increase.
B) achieve lower profits since worker efficiency would fall and wages per unit of output increase.
C) achieve higher profits.
D) achieve lower per unit wage costs.
Correct Answer:
Verified
Correct Answer:
Verified
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