When employers pay an efficiency wage above the market equilibrium wage, this will likely result in
A)a surplus of labor.
B)no unemployment.
C)an increase in the number of people employed.
D)an decrease in the quantity of labor supplied.

Question

Quizplus · Accepted Answer

Paying an efficiency wage above the market equilibrium wage can lead to a surplus of labor because more workers are willing to work at the higher wage, but employers do not need as many workers, resulting in unemployment.

When Employers Pay an Efficiency Wage Above the Market Equilibrium