Business, 18.04.2020 01:24 leahumelinda

Suppose all perfectly competitive fast-food firms are hiring the profit-maximizing quantity of labor and are
paying their workers $7 per hour. Then suppose the government decides to raise the minimum wage to $8 per hour. Then:

a. since the value of the marginal product would exceed the wage, firms would hire more workers.
b. since the value of the marginal product would be less than the wage, firms would lay off some workers.
c. the firms would increase their prices to keep the value of the marginal product equal to the wage.
d. firms would have to exit the industry since the value of the marginal product is less than the wage.
e. firms would be unable to alter their hiring because the minimum wage is set by the government.

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Suppose all perfectly competitive fast-food firms are hiring the profit-maximizing quantity of labor...