It is generally more profitable for a firm to pay workers more than the going wage rate:

Question

Quizplus · Accepted Answer

Paying workers more than the going wage rate can be beneficial for a firm in various situations.

A) In sectors where skills are scarce, paying a higher wage can attract better-qualified employees as well as retain current skilled workers.

B) In industries in which worker motivation really matters, a higher wage can incentivize employees to work harder or increase productivity, leading to higher profits for the firm.

C) In areas in which turnover is very costly, paying a higher wage can reduce employee turnover, which can save a firm money in the long run.

Therefore, all of the given options are true, making option D the correct answer.

It Is Generally More Profitable for a Firm to Pay