Changes in labor productivity, changes in the quality of labor, and changes in the price of labor are three factors that explain why labor costs eventually
A) increase at a decreasing rate
B) increase at an increasing rate
C) decrease at an increasing rate
D) decrease at a decreasing rate
E) become constant

Question

Quizplus · Accepted Answer

As labor productivity increases, the cost per unit of output may initially decrease, but as the quality and price of labor improve, labor costs tend to increase at an increasing rate due to higher wages and benefits associated with more skilled labor.

Changes in Labor Productivity, Changes in the Quality of Labor