Dawn is the CEO of a corporation that hires nonunion labour. According to the theory of efficiency wages, if she decides to pay her workers more than the competitive equilibrium wage, which of the following is most likely to happen?
A) The profits of her firm may increase.
B) The higher wages will induce her workers to shirk.
C) The turnover of her workers may increase.
D) She will face a shortage of labour.
Correct Answer:
Verified
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