Paying efficiency wages means that wages are a. above equilibrium, and profits are higher than otherwise. b. above equilibrium, and profits are lower than otherwise. c. below equilibrium, and profits are higher than otherwise. d. below equilibrium, and profits are lower than otherwise.

Question

Business

Josue

8 February, 08:50

Paying efficiency wages means that wages are a. above equilibrium, and profits are higher than otherwise. b. above equilibrium, and profits are lower than otherwise. c. below equilibrium, and profits are higher than otherwise. d. below equilibrium, and profits are lower than otherwise.

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Answers (1)

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Roger Stafford · Answer 1

a. above equilibrium, and profits are higher than otherwise.

Explanation:

As if we pay high wages to our labors than our labors are happy and produced more quantities as compare to before which results into higher profits that shows the efficiency wages above equilibrium

Plus the high wages is connected to somewhat high cost for the company but in return the company could get high sales which transform into high profits.

Hence, the first option is correct