As the wage rate rises,firms will respond by
A) hiring more workers because a higher wage rate will make workers work harder, thus increasing profits for the firm.
B) hiring fewer workers because the labor demand curve slopes downward.
C) selling more output to cover the additional costs of the labor force.
D) selling the same amount of output, but passing on the higher labor costs to the customer in the form of higher prices.
Correct Answer:
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