A. A differential piece rate scheme B. A piece rate scheme with a minimum guaranteed wage C. A straight time rate scheme D. A straight piece rate scheme
The correct answer is: A piece rate scheme with a minimum guaranteed wage
The graph shows a constant wage up to a certain level of output, which is payable even at zero output. This is the minimum guaranteed wage. Above a certain output the wage cost rises at a constant rate. This is the piece rate payable in addition to the minimum wage.
Graphs for the other options would look like this:
