When the minimum wage is raised in a competitive market,ceteris paribus,
A)All workers are better off.
B)All workers are worse off.
C)Some workers are better off and some are worse off.
D)Workers are not affected by a minimum wage increase,only by decreases.

Question

Quizplus · Accepted Answer

When the minimum wage is raised in a competitive market, some workers are better off and some are worse off. Those who were previously earning less than the new minimum wage will see an increase in their income and will be better off. However, employers may respond to the increase in labor costs by hiring fewer workers, which means some workers may lose their jobs or have their hours reduced, leading them to be worse off. Overall, the effect of a minimum wage increase on workers in a competitive market is mixed.

When the Minimum Wage Is Raised in a Competitive Market,ceteris