For a minimum wage to have any impact on a labor market,it must be set at a level
A)Higher than the equilibrium wage.
B)Higher than MPP.
C)Higher than MRP.
D)Consistent with economic growth.

Question

Quizplus · Accepted Answer

The minimum wage must be set higher than the equilibrium wage, which is the market-clearing wage rate where the supply of labor equals demand for labor, in order to have any impact on the labor market. If it is set below the equilibrium wage, it will not affect the market and may even lead to job loss as employers could replace workers with automation or higher skilled labor.

For a Minimum Wage to Have Any Impact on a Labor