Wages that are too high may lead to a firm being non-competitive.

Question

Quizplus · Accepted Answer

If a firm pays higher wages than its competitors, it may not be able to produce goods at a competitive price, making it difficult to attract customers and stay in business. This can lead to a decrease in profits and even bankruptcy. Therefore, it is crucial for firms to maintain a balance between paying fair wages to employees and remaining competitive in the market.

Wages That Are Too High May Lead to a Firm