9. Suppose workers in a particular firm join a company health program, cut down on smoking and drinking, and get more exercise. Further suppose this significantly increases their productivity. If the firm behaves as a profit maximizer it will respond by:
- hiring fewer workers since it takes fewer workers to produce the same amount of output.
- hiring more workers since the additional output produced by each more productive worker has the same effect as lowering production costs.
- reduce the wage to make up for the change in productivity.
- keep employment the same and enjoy greater profits.
- it all depends on the supply elasticity of labor's marginal demand.
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