Brian is the owner of a firm that produces bottled water in Washington state. There are many other such firms in the area. Brian decides that if he pays his workers a wage higher than the going market wage, his profits will increase. Which of the following is a likely explanation for his decision?
A)The higher the wage, the less often his workers will choose to leave his firm.
B)The higher the wage, the lower will be the cost of obtaining needed supplies.
C)The higher the wage, the more he can charge for his water.
D)The higher the wage, the more he will have to monitor his workers for shirking.

Question

Quizplus · Accepted Answer

Paying a higher wage than the going market wage can reduce employee turnover, which can lower hiring and training costs for the firm. This can result in increased profits.

Brian Is the Owner of a Firm That Produces Bottled