Ergo Co Is a Manufacturing Company Based in Texas

question 92

Multiple Choice

Ergo Co. is a manufacturing company based in Texas. In the year after Ergo Co. implemented a comparable-worth policy, its expenses increased, and as a result, profits declined. What difficulty of comparable-worth policies does this example illustrate?

• A) The employer is at an economic disadvantage because of increased pay for some jobs.
• B) The policy overlooks the undervalued work performed by women.
• C) The policy uses job enrichment to establish a pay structure based on market rates.
• D) The employer ignores the evaluation points for each job.
• E) Employees in lower-paid jobs are encouraged to meet the goal of comparable worth.

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Definitions:

Differentiated Products

Goods that are fundamentally similar but are distinguished from each other by characteristics like quality, branding, and features.

Perfect Competition

A market structure characterized by many sellers and buyers, homogeneous products, and the absence of barriers to entry or exit.

Excess Capacity

A situation in which a firm produces less than the maximum output due to lack of demand or strategic choice, leading to underutilized resources.

Average Total Cost

The total cost of production (fixed plus variable costs) divided by the number of units produced, representing the cost per unit.