If a minimum wage is set above the equilibrium market wage,

Question

Quizplus · Accepted Answer

When a minimum wage is set above the equilibrium market wage, employers are forced to pay their workers more than they would have in a free-market situation. As a result, the cost of labor becomes more expensive for employers, who then choose to hire fewer workers at the higher wage. This leads to a situation where the quantity of labor demanded will be below the quantity of labor supplied, causing unemployment. Therefore, choice B is the best answer.

If a Minimum Wage Is Set Above the Equilibrium Market