What is the opportunity cost for a company paying a worker $15?Can the company continue...

What is the opportunity cost for a company paying a worker $15? Can the company continue to pay $15/hr if the market wages are $20? Explain why and how.

Expert Solution

opportunity cost is the next best alternative

If the company is paying his worker $15 assuming the same potential worker being paid higher than $15 will be the opportunity cost as lower than $15 wage accepting worker will surely be appointed to reduce the cost with same potential.

so opportunity cost will be worker with higher wage than $15

yes, it can continue to pay if the worker accept so because market wage is not the minimum wage rate if minimum wage rate is $20 then its compulsory to pay $20 but now as it is market wage rate so company can bargain with worker and deal with him accordingly.

Rahul Sunny answered 2 years ago

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