Why can payroll costs vary widely from one location to another?

1. Labor is a critical input for manufacturing and service businesses alike. 2. Its price is not the same everywhere, and three things drive the difference. 3. The first is the cost of living in the area, which sets the wage a worker needs. 4. The second is the number of jobs available, which decides how hard employers must compete for people. 5. The third is the size, skills, and productivity of the local workforce, which decides what an hour of that labor is worth. 6. Option A is wrong because wages differ within a country as well as between countries, and options C and D confuse payroll with unrelated costs and parties. _Source: OpenStax Introduction to Business (CC BY 4.0), Ch 10 "Achieving World-Class Operations Management", section Availability of Production Inputs_