Employers may choose to pay their workers a wage that exceeds the equilibrium wage according to
A)efficiency-wage theories.
B)equilibrium wage theories.
C)screening theories.
D)signaling theories.

Question

Quizplus · Accepted Answer

Employers may choose to pay their workers a wage that exceeds the equilibrium wage according to efficiency-wage theories, which suggest that higher wages can increase worker productivity, lower turnover rates, and attract higher-quality workers. By paying a higher wage than the market would demand, an employer can potentially gain a competitive advantage by creating a more productive workforce.

Employers May Choose to Pay Their Workers a Wage That