If the equilibrium wage in a competitive labour market is $9 per hour,and the government raises the minimum wage from $7 to $8 per hour,what will be the effect in this market?
A)the level of employment will decrease
B)unemployment will increase
C)unemployment will decrease
D)there will be no effect on employment
E)the average wage paid to workers will increase

Question

Quizplus · Accepted Answer

Since the new minimum wage of $8 is still below the equilibrium wage of $9, it will not affect the market, and employment levels will remain unchanged.

If the Equilibrium Wage in a Competitive Labour Market Is