Regarding an Increase in Wage, Which of the Following Is

question 23

Multiple Choice

Regarding an increase in wage, which of the following is INCORRECT?

• A) The wage increases will reduce output, therefore total costs will be reduced as well.
• B) In a perfectly competitive industry, the wage increases will reduce output, which raises the market price of the product.
• C) In the case of wage increases, the scale effect and the substitution effect work in the same direction to reduce labour demand.
• D) In a perfectly competitive industry, the wage increases shift up the firm's marginal and average cost curves.
• E) In a monopoly, the wage increases will raise the product price and reduce output.

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