-The figure above shows the market for low-skilled labor in Midland city in a nation to the south. The government sets a minimum wage at $6 per hour. The minimum wage ________ the employers' surplus by ________ million per year.

Question

Quizplus · Accepted Answer

The minimum wage decreases the employers' surplus because it sets a wage floor above the equilibrium wage, leading to a reduction in the quantity of labor demanded by employers. The specific decrease in surplus is calculated based on the difference between the equilibrium wage and the minimum wage, multiplied by the change in quantity of labor hired.

-The Figure Above Shows the Market for Low-Skilled Labor in Midland