Assume that a firm with market power in output market wishes to grow up and that hiring more workers needs it to increase wages 8% for all the workers. Output prices will most likely: (1) Increase 8% to cover the wage raise. (2) Increase less than 8% as wages are only a part of the costs. (3) Increase more than 8% as each employee works with very less capital. (4) Drop 8% as of the technological advances.
Can someone please help me in finding out the accurate answer from the above options.