Answered: Sometimes firms pay wages above the…

Sometimes firms pay wages above the market-clearing wage (efficiency wages). Wages are a coat to a firm. Give two reasons why a firm would CHOOSE to pay efficiency wages.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Sometimes firms pay wages above the market-clearing wage (efficiency wages). Wages are a coat to a firm. Give two reasons why a firm would CHOOSE to pay efficiency wages.

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