If the price of output decreases, the equilibrium wage of workers who produce that output will ________ and ________ workers will be hired.

Question

Quizplus · Accepted Answer

When the price of output decreases, the revenue generated from selling that output also decreases. This typically leads to a reduction in the equilibrium wage for workers producing that output, as firms seek to cut costs. Consequently, firms may also hire fewer workers to further reduce expenses.

If the Price of Output Decreases, the Equilibrium Wage of Workers