Question

A small town has few available workers, and unemployment is low. A family-owned restaurant in town has just had a very good year in profits and would like to hire additional wait staff to meet higher demand. Based on what you know of how worker earnings are determined, which of the following will most likely happen?A. The restaurant will post strict education requirements for new hires.B. The restaurant will offer a lower wage than other comparable businesses in the area.C. The restaurant will decrease pay for existing workers.D. The restaurant will offer a higher wage than other comparable businesses in the area.

Answer 1

Option D; THE RESTAURANT WILL OFFER A HIGHER WAGE THAN OTHER COMPARABLE BUSINESSES IN THE AREA.

Step-by-step explanation:

The law of supply and demand theory defines what effect the relationship between the availability of a particular product and the desire (or demand) for that product has on its price.

When supply remains constant and demand increases, then price increases. Due to the limited supply, people start to pay more for the same service in order to have it.

Since the town has few available workers and unemployment is low, then hiring a worker will not be easy because there are competitors who want the workers also. Therefore, THE RESTAURANT WILL HAVE TO OFFER A HIGHER WAGE THAN OTHER COMPARABLE BUSINESSES IN THE AREA in other to attract the available workers for the job.