If the marginal product of labor is less than the nominal wage divided by the price of output, a firm that wishes to maximize profits will raise the real wage. Ⓒhire more labor. maintain its current level of workers. Ⓒlay off workers.
If the marginal product of labor is less than the nominal wage divided by the price of output, a firm that wishes to maximize profits will raise the real wage. Ⓒhire more labor. maintain its current level of workers. Ⓒlay off workers.
Chapter10: Labor Markets And Income Distribution
Section: Chapter Questions
Problem 12SQ
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