The above figure shows the supply and demand curves for high-skilled and low-skilled labor. The figure shows that high-skilled workers earn a wage rate greater than low-skilled workers because
A) the supply of high-skilled labor is greater than the supply of low-skilled labor.
B) high-skilled labor has a lower value of marginal product.
C) of both the cost of acquiring skills and the differences in the value of marginal products.
D) of discrimination.
Question 2
A monopolistically competitive firm can increase its economic profit by ________.
A) developing new products
B) producing at the efficient quantity
C) eliminating excess capacity
D) advertising less
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