When the price firms receive for their output rises,the resulting ________ in the real wage rate leads firms to profitably employ ________ labor than before,thus ________ the amount of output willingly supplied.
A)fall,more,raising
B)fall,less,raising
C)rise,less,lower
D)rise,more,raising

Question

Quizplus · Accepted Answer

When the price firms receive for their output rises, the real wage rate effectively falls because wages do not immediately adjust to the price level increase. This makes labor cheaper for firms, leading them to employ more labor, thus raising the amount of output willingly supplied.

When the Price Firms Receive for Their Output Rises,the Resulting