The following figure shows the labor demand curve, LD₁, and labor supply curve, LS₁, in a market.

-Refer to the figure above.If the government sets the minimum wage rate at $35,the unemployment in the market will be ________.

Question

The following figure shows the labor demand curve, LD₁, and labor supply curve, LS₁, in a market.
 
-Refer to the figure above.If the government sets the minimum wage rate at $35,the unemployment in the market will be ________.

Quizplus · Accepted Answer

At a minimum wage rate of $35, the quantity of labor demanded decreases to Qd₁, while the quantity of labor supplied increases to Qs₁. The difference between Qd₁ and Qs₁ is 20 units of labor, which represents the unemployment in the market. Therefore, the correct answer is C: 20 units of labor.

The Following Figure Shows the Labor Demand Curve, LD₁, and Labor