As the wage rate rises, other things constant, perfectly competitive firms will employ

Question

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As the wage rate rises, the cost of production for firms increases. To offset this increased cost, firms may choose to employ fewer workers and rely more on capital-intensive production methods or technology. This is because an increase in wage rate means a higher cost per unit of labor, making capital relatively more attractive. Therefore, firms would likely choose to substitute capital for labor, leading to a reduction in the number of workers employed.

As the Wage Rate Rises, Other Things Constant, Perfectly Competitive