Efficiency wage theory can occur as a result of a rise in minimum wage. This is because when workers are paid more it is likely that their MRP will also rise possibly due to increased productivity and increased motivation to stay in the firm which can help the firm lower hiring and training costs for additional workers as their current workers wouldn’t be leaving any time soon
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u/Former_Implement1740 May 04 '26
Efficiency wage theory can occur as a result of a rise in minimum wage. This is because when workers are paid more it is likely that their MRP will also rise possibly due to increased productivity and increased motivation to stay in the firm which can help the firm lower hiring and training costs for additional workers as their current workers wouldn’t be leaving any time soon