How does the theory of efficiency wages explain above-equilibrium wages?

Question

Quizplus · Accepted Answer

The theory of efficiency wages proposes that employers give their workers a higher wage in the hope that it will lead to increased productivity. By paying above the market equilibrium wage, employers can attract and retain higher-quality workers who are more motivated and productive. This can ultimately benefit the firm by increasing output and reducing costs.

How Does the Theory of Efficiency Wages Explain Above-Equilibrium Wages