Given a 3 Percent Decrease in Wages,firm a Hires More

question 20

Multiple Choice

Given a 3 percent decrease in wages,firm A hires more labor than firm B.It follows that,ceteris paribus,

• A) the elasticity of demand for the product that firm A produces is lower than the elasticity of demand for the product that firm B produces.
• B) firm A has a lower labor cost-total cost ratio than firm B.
• C) firm A has more substitutes for labor than firm B.
• D) firm A has higher per-unit costs than firm B.
• E) none of the above

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