Widgets are provided by a constant-cost industry. Each firm employs one executive and a variable number of workers. Consider the following two scenarios:
Scenario A. Executive salaries rise, causing the price of a widget to rise by $5 in the long run.
Scenario B. Workers' salaries rise, causing the price of a widget to rise by $5 in the long run.
Of the two scenarios, which leads to a larger quantity of widgets per firm in the long run?