What are the effects on marginal cost and output when a firm's wage expenses rise?

Show Answers

marginal cost rises, and production decreasesmarginal revenue rises, and production decreasesopportunity cost rises, leading the firm to shut downaverage cost increases, and output rises with a shift upward in marginal revenue

Explanation

An increase in wage costs leads to higher marginal costs, which typically causes the firm to reduce its output. The other options either incorrectly link marginal revenue changes or misstate the firm's response to cost increases.