Buddy is the owner of a firm that bottles beer in St.Louis,Missouri.There are many other such firms in the area.Buddy decides that if he pays his workers a wage higher than the going market wage,his profits will increase.Which of the following is a likely explanation for his decision?
A)The higher the wage,the less often his workers will choose to leave his firm.
B)The higher the wage,the lower will be the costs of obtaining needed supplies.
C)The higher the wage,the more he can charge for his beer
D)The higher the wage,the more he will have to monitor his workers for shirking.

Question

Quizplus · Accepted Answer

By paying his workers a higher wage than the going market rate, Buddy is hoping to retain his workers and reduce the turnover rate. This will enable him to save on the costs of hiring and training new workers, ultimately increasing his profits.

Buddy Is the Owner of a Firm That Bottles Beer