The cost of the minimum wage is most likely borne by:
A)consumers who buy goods produced in the covered industry.
B)producers who produce goods in the covered industry.
C)producers in both the covered and uncovered industries.
D)consumers who have a perfectly elastic demand for goods produced by the covered industry.

Question

Quizplus · Accepted Answer

When the minimum wage is implemented, it increases the cost of labor for producers in the covered industry. As a result, they may choose to increase the prices of their goods and services to cover the increased cost. This means that consumers who buy goods and services produced in the covered industry will bear the cost of the minimum wage in the form of higher prices.

The Cost of the Minimum Wage Is Most Likely Borne