Which reason is a plausible explanation for a firm paying above-equilibrium wages to its workers
A)It increases the probability that a worker who shirks will be caught.
B)It discourages workers from shirking.
C)It pays a premium for workers to work overtime.
D)It increases their costs but lowers their net taxes due.

Question

Quizplus · Accepted Answer

By paying above-equilibrium wages, the firm can create a sense of loyalty and commitment among its workers, which can discourage them from shirking or engaging in other unethical or unproductive behaviors. This can ultimately benefit the firm in terms of higher productivity, lower turnover, and better overall performance.

Which Reason Is a Plausible Explanation for a Firm Paying