If a minimum wage is set above the free- market equilibrium wage in a competitive labour market,the labour market will experience an increase in wages and

Question

Quizplus · Accepted Answer

When the minimum wage is set above the free-market equilibrium wage, employers will have to pay more for their workers than they would in a free-market system. This will lead to an increase in wages for those workers who are able to keep their jobs, but it will also lead to a decrease in employment as some employers may not be able to afford to pay the higher wages and will have to lay off some workers or not hire new ones. Therefore, option B is the correct choice.

If a Minimum Wage Is Set Above the Free- Market