Several firms in an industry laid off their workers.Assuming all else equal,this will lead to a ________.
A) higher rate of capacity utilization in the industry
B) higher real wage in the industry
C) higher rate of output in the industry
D) lower rate of capacity utilization in the industry

Question

Quizplus · Accepted Answer

Layoffs will reduce the labor force in the industry, which could result in a lower rate of capacity utilization. If the layoffs were due to reduced demand for the industry's output, then there would be less need for capacity utilization.

Several Firms in an Industry Laid Off Their Workers