13. One of the many implications of Alchians analysis of the roles that

environmental selection, chance, and uncertainty play is that empirical

investigations via questionnaire methods, so far used, are incapable of evaluating

the validity of marginal productivity analysis. For example, we sometimes see

articles about how businessmen state that they will not or cannot adjust their labor

force in the face of increases in the real wage rate. Yet, when the dust settles, we

do observe an overall higher capital-labor ratio. What factor(s) probably explain

this?

a. Firms with lower labor cost positions will, at least in that respect, have a

higher probability of survival (selection) into the next period

b. The environmental force of competition will eliminate all firms that dont

cut labor costs

c. Businessmen tend to lie to survey takers and reporters in order to mask

their intentions

d. None of the above

With Explanation please! I am stuck between A and B. Thanks