Efficiency wages cause unemployment because
A) firms pay wages that are below the market wage, causing the quantity of labour demanded to be greater than the quantity of labour supplied.
B) firms pay wages that are below the market wage, causing the quantity of labour demanded to be less than the quantity of labour supplied.
C) firms pay wages that are above the market wage, causing the quantity of labour demanded to be greater than the quantity of labour supplied.
D) firms pay wages that are above the market wage, causing the quantity of labour demanded to be less than the quantity of labour supplied.
E) firms pay wages that are above the market wage, causing the quantity of labour demanded to increase in all industries.
Correct Answer:
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