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Why Does the Labor Market Have More Than One Equilibrium

Question 12

Multiple Choice

Why does the labor market have more than one equilibrium wage rate?


A) Workers differ in their productivities.
B) Productivity of the workers initially increase but later decline.
C) The labor demand curve is backward bending.
D) Marginal revenue product of the different inputs used by firms vary.
E) Employers compete among themselves to hire the best workers.

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