Question

economic problem: Farm Labor Shortages

question: If farmers raise wages in order to attract more workers, will that make the agricultural industry uncompetitive?

Answer 1

The given statement is true to an extent and this is because if the farmers increase the wages to attract more labour what happens is that there would be shortage of labour due to excess supply and less demand at the same budget levels of the farmers as a result of which less production will take place than before with which the competitiveness of the industry will reduce due to less production on the whole and that is the reason why to an extent the given statement can be agreed upon