Suppose the current equilibrium wage rate for housekeepers is $8.60 per hour.An increase in the minimum wage to $7.50 per hour leads to
A) a surplus of housekeepers.
B) a shortage of housekeepers.
C) no change in the market for housekeepers.
D) an increase in the quantity of housekeepers supplied.
E) unemployment of housekeepers.

Question

Quizplus · Accepted Answer

Since the new minimum wage ($7.50) is below the current equilibrium wage ($8.60), it will not affect the equilibrium condition. Employers are already paying more than the new minimum wage, so there's no reason for the quantity supplied or demanded to change.

Suppose the Current Equilibrium Wage Rate for Housekeepers Is $8