Bewley interviewed more than 300 employers, labour leaders, business consultants, and careers advisors in the northeast of the US. He found that employers chose not to cut wages because they thought it would hurt employee morale, reducing productivity and leading to problems of hiring and retention. They thought it would ultimately cost the employer more than the money they would save in wages.

After reading the above, use the best response diagram to sketch the results found by Lazear and co-authors in their study of a firm during the global financial crisis.