AB Consulting and DF Partners are two identical consulting firms in all aspects except that AB Consulting fires all new hires who don’t bring in at least \($5\) million in revenue during their 4-year probationary term while DF Partners fires all new hires who don’t bring in at least \($2\) million in revenue during their 4-year probationary term.

(a) Assuming no worker likes to take on the risk of being fired, what would you expect salaries to look like across the two firms? That is, how do you expect the compensating differential to appear?

(b) Suppose rather than seeing what you predicted in part (a), it terms out that salaries are the same in both firms. Provide a few explanations as to why this might be the case.