In an economy, firms with more market power tend to set higher prices relative to their production costs. If a long-term trend leads to a general decrease in competition across industries, allowing the average firm to increase its pricing power, what is the most likely consequence for the labor market equilibrium, holding workers' bargaining power constant?
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In an economy, firms with more market power tend to set higher prices relative to their production costs. If a long-term trend leads to a general decrease in competition across industries, allowing the average firm to increase its pricing power, what is the most likely consequence for the labor market equilibrium, holding workers' bargaining power constant?
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