system
Given the following post, respond as if you're commenting on Reddit:
human
Would businesses benefit by raising wages so that workers can afford to spend more money on their products?

I heard that Henry Ford paid his employees relatively high wages for this reason.
gpt
Firms that pay businesses wages higher than the equilibrium rate is known as **efficiency wages**. Studies have shown that workers are motivated to work harder if they receive a wage higher than the equilibrium rate. 

- By paying a wage above the market wage, the firm raises the costs of workers of losing their jobs because alternative jobs may pay only the market wage (think opportunity cost here). 

- The increase in productivity that results from paying the high wage can more than offset the cost of the wage, thereby lowering the firm's cost of production.