In an economic model where firms determine prices by applying a fixed percentage markup over their labor costs, a widespread technological improvement that boosts the average output per worker will cause the proportion of that output paid to workers as wages to increase.
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In an economic model where a firm's price-setting behavior determines the real wage, suppose there is a significant decrease in market competition, allowing firms to increase their profit margins. What is the direct consequence for the portion of each worker's output that is paid out as wages?
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In an economic model where firms determine prices by applying a fixed percentage markup over their labor costs, a widespread technological improvement that boosts the average output per worker will cause the proportion of that output paid to workers as wages to increase.
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