Firms with increasing productivity rates can provide higher wage increases to workers more easily than firms with declining productivity rates.

Question

Quizplus · Accepted Answer

Productivity is a key factor in determining the profitability and competitiveness of a firm. Firms with increasing productivity rates are able to produce more output with the same amount of input, allowing them to generate more revenue and profits. This can enable them to provide higher wage increases to workers without significantly impacting their bottom line. On the other hand, firms with declining productivity rates may struggle to maintain profitability, making it more difficult for them to offer higher wage increases to their employees.

Firms with Increasing Productivity Rates Can Provide Higher Wage Increases