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Suppose employment and wages are determined by an implicit contract specifying a fixed wage at which workers must supply as much labour as the firm
Suppose employment and wages are determined by an implicit contract specifying a fixed wage at which workers must supply as much labour as the firm demands. Then firms earn _________ profits and workers earn __________ income during periods of high demand, compared to the alternative in which employment and wages are determined purely by competitive labour market forces. higher; higher higher; lower lower; higher lower; lower
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