A legislated minimum wage is said to be binding when

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A legislated minimum wage is binding when it raises the wage rates in an industry above the free-market equilibrium level, meaning that employers are required to pay at least that amount to their employees by law. This can result in some negative effects such as reduced employment and higher prices for goods and services, but it can also improve the standard of living for workers who are able to earn a higher wage.

A Legislated Minimum Wage Is Said to Be Binding When