Business, 05.05.2020 05:28 ernestscott406

The marginal productivity theory states that if a firm operates in a perfectly competitive factor market, it pays each factor of production its marginal revenue product. However, this theory may fail to hold if factor markets are not competitive.

One circumstance under which factor markets may fail to be competitive is if there is imperfect information. Which of the following are examples of how information problems can lead to inefficient outcomes? Check all that apply.

a. If a firm can't tell who its most productive workers are, it must pay everyone the same wage.

b. Workers who are actually productive may not be hired if they don't have the credentials required by a screening process.

c. Firms may discriminate against workers or suppliers they don't trust.

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