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If new working practices raise a firm s productivity, will

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Director
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If new working practices raise a firm s productivity, will  [#permalink]

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New post Updated on: 15 Mar 2018, 22:37
3
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A
B
C
D
E

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  45% (medium)

Question Stats:

58% (01:21) correct 42% (01:31) wrong based on 110 sessions

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If new working practices raise a firm's productivity, will the firm respond by paying its workers more? Not in a competitive market. In such a market the firm, to gain a competitive edge, will reduce prices. The workers' real wages, as measured by those wages' purchasing power, will still rise because of lower prices.

In a competitive market which of the following, if true, ensures that the workers of a firm that achieved productivity gains will derive from these gains the benefit of higher real wages?

(A) The workers' firm continues to achieve productivity gains.
(B) Other firms do not achieve comparable productivity gains.
(C) The workers buy products made by the firm that employs them.
(D) The workers prefer the new working practices over the old.
(E) The firm pays its workers at or above the industry's average.

Originally posted by qhoc0010 on 07 Jan 2005, 17:19.
Last edited by broall on 15 Mar 2018, 22:37, edited 1 time in total.
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Director
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Re: If new working practices raise a firm s productivity, will  [#permalink]

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New post 08 Jan 2005, 23:01
Arguement here is
In such a market the firm, to gain a competitive edge, will reduce prices.

The workers’ real wages,purchasing power, will still rise because of lower prices.

That means workers can benifit from the price cuts only if they purchase products made from this company.

in this context,
choices B,D & E are out of context
Choice A is irrelavant. Hope this helps.
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Re: If new working practices raise a firm s productivity, will  [#permalink]

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New post 10 Jan 2005, 12:24
(C)
Same explanation PRaveen gave
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Re: If new working practices raise a firm s productivity, will  [#permalink]

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New post 10 Jan 2005, 14:31
my choice is C

The only way the worker will gain without wage increase is by buying their company's products, which prices are going down.
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Re: If new working practices raise a firm s productivity, will  [#permalink]

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New post 19 Aug 2018, 22:43
Hello from the GMAT Club VerbalBot!

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Re: If new working practices raise a firm s productivity, will &nbs [#permalink] 19 Aug 2018, 22:43
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