If the market wage for fast-food restaurants is $4 and the government enforces a minimum wage of $7,the unemployment rate will

Question

Quizplus · Accepted Answer

The minimum wage is higher than the market wage, so employers will be less willing to hire as many workers. This means that the quantity of labor supply will increase (more people will want to work at the higher wage) and the quantity of labor demand will decrease (employers will want to hire fewer workers at the higher wage). The result is a surplus of labor or unemployment. Therefore, the unemployment rate will increase as a result of the minimum wage.

If the Market Wage for Fast-Food Restaurants Is $4 and the Government