If a firm in a competitive labor market offers less than the market wage rate if it will
A) be able to attract a large number of employees because the marginal revenue product is low.
B) find that it has broken a federal wage law.
C) attract too few employees.
D) find that the supply is greater than the demand.

Question

Quizplus · Accepted Answer

In a competitive labor market, offering less than the market wage rate will result in attracting too few employees. This is because employees have the option to choose from multiple jobs, and they would prefer a job that pays them the market wage rate or higher. Offering less than the market wage rate would put the firm at a disadvantage, as they would have difficulty attracting and retaining employees.

If a Firm in a Competitive Labor Market Offers Less