If Company a Raises Its Pay Rate by One Dollar

question 31

Multiple Choice

If Company A raises its pay rate by one dollar per hour to hire additional workers and competitors immediately match the increase, what will be the most likely result?

• A)The labor costs for Company A will increase, but it will be unable to hire additional workers.
• B)Company A will hire the needed workers at a higher wage rate.
• C)Competitors of Company A will lose employees to Company
• D)Company A will hire higher quality workers.

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Definitions:

PID Controller

A proportional–integral–derivative controller used in industrial control systems to continuously calculate an error value and apply correction.

Optimum Performance

The most efficient and effective level of functioning of a system or device.

Menu Costs

The costs incurred by firms in order to change their prices, including costs related to printing new menus, re-tagging items, or advertising new prices.