Problem
Workers in a certain job are trained by the company, and the company calculates that to recoup its investment costs, the workers' wages must be $5 per hour below their marginal productivity. Suppose that after training, wages are set at $5 below marginal productivity but that developments in the product market quickly (and permanently) reduce marginal productivity by $2 per hour. If the company does not believe it can lower wages or employee benefits, how will its employment level be affected in the short run? How will its employment level be affected in the long run? Explain, being sure to define what you mean by the short run and the long run!
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.