-City-Mart is the only employer of sales clerks in Panburg. In the figure above S is the labor supply curve faced by City-Mart, VMP is City-Mart's value of marginal product curve, and MCL is its marginal cost of labor curve. If a minimum wage law is passed that requires employers to pay at least $7 per hour, City-Mart will employ ________ hours of sales clerk labor per day.

Question

Quizplus · Accepted Answer

The minimum wage law sets a wage floor at $7 per hour. City-Mart will employ workers up to the point where the wage equals the marginal cost of labor (MCL). At $7, the intersection of the MCL and the labor supply curve indicates 70 hours of labor.

-City-Mart Is the Only Employer of Sales Clerks in Panburg