Labor productivity will decrease if a firm

Question

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Holding excess labor means that the firm has more workers than needed for a given level of output, which can lead to a decrease in labor productivity. This is because each worker will have less to do, and may not be as motivated to work efficiently. While paying efficiency wages, improving benefits, and boosting morale can all lead to increased productivity, none of these factors alone would necessarily cause a decrease in productivity.

Labor Productivity Will Decrease If a Firm