If there are costs associated with employee turnover,and to reduce these costs,a firm increases the wage it pays its employees,then
A) the firm's profits must decrease.
B) the firm's profits must increase if turnover costs fall.
C) the firm's profits must increase if the turnover rate falls by three percent or more.
D) the firm's profits could increase or decrease, depending on the amount in the wage increase and the change in the turnover rate.

Question

Quizplus · Accepted Answer

The increase in wages could potentially reduce turnover costs by retaining more employees, leading to increased profits. However, the offsetting cost of the wage increase could also decrease profits. Therefore, the firm's profits could increase or decrease depending on the specific circumstances.

If There Are Costs Associated with Employee Turnover,and to Reduce