A local Starbucks needs exactly five baristas to make coffee during a shift. In this case, the demand curve for baristas is perfectly _____, and an increase in minimum wage above the equilibrium wage will lead to _____ in the wage of workers.

Question

Quizplus · Accepted Answer

The demand curve for baristas in this scenario is perfectly inelastic because the Starbucks needs exactly five baristas, regardless of the wage. An increase in minimum wage above the equilibrium wage will lead to an increase in the wage of workers, as the employer is required to pay the higher wage rate.

A Local Starbucks Needs Exactly Five Baristas to Make Coffee