We know that a firm is paying way below the market if:
A) the number of applications for a job posting is high and the quit rate is low.
B) the number of applications for a job posting and the quit rate are high.
C) the number of applications for a job posting and the quit rate are low.
D) the number of applications for a job posting is low and the quit rate is high.

Question

Quizplus · Accepted Answer

If the number of applications for a job posting is low, it indicates that the firm is not able to attract top talent, which could be because they are paying below the market rate. Similarly, if the quit rate is high, it suggests that the employees are not satisfied with the current pay and are more likely to leave for a higher-paying job. Therefore, D is the best choice as it indicates that the firm is paying below the market rate.

We Know That a Firm Is Paying Way Below the Market