Given a 10 percent increase in wages,firm A cuts back on labor more than firm B.It follows that,ceteris paribus,
A) firm A has a higher labor cost-total cost ratio than firm B.
B) firm B has a higher labor cost-total cost ratio than firm A.
C) the elasticity of demand for labor is higher for firm B than firm A.
D) firm B has higher fixed costs than firm A.
E) firm A has higher per-unit costs than firm B.
Correct Answer:
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