If the wage rate increases,
A) a purely competitive producer will hire less labor, but an imperfectly competitive producer will not.
B) an imperfectly competitive producer will hire less labor, but a purely competitive producer will not.
C) a purely competitive producer and an imperfectly competitive producer will both hire less labor.
D) an imperfectly competitive producer may find it profitable to hire either more or less labor.

Question

Quizplus · Accepted Answer

Both purely competitive and imperfectly competitive producers will hire less labor if the wage rate increases because the cost of labor has risen, reducing the marginal benefit of hiring additional workers.

If the Wage Rate Increases