If a school that offers higher wages to its staff is set up near a school that offers comparatively lower wages to its staff, what will be the effect on the wage rate and the staff strength in the school that pays lower wages?
What will be an ideal response?
In such a case, it is likely that some of the members of the staff will shift from the school paying lower wages to the school paying higher wages. This shift, in turn, will lead to an increase in wages and a smaller staff in the school paying lower wages.
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