Suppose a firm finds that it must raise wages for all of its workers every time it tries to expand its workforce.This means

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If a firm has to raise wages for all workers every time it tries to expand its workforce, it suggests that the firm has market power. In a competitive labor market, the firm would have to offer higher wages only to attract the additional workers it needs, but it would not have to raise wages for all workers. This behavior is consistent with a firm that faces a relatively inelastic labor supply curve because it has market power and can influence wages in the market.

Suppose a Firm Finds That It Must Raise Wages for All