Because minimum wage is a price floor
A)it will be set below the market equilibrium price.
B)it will create a deadweight loss.
C)it will increase the number of jobs available in the labor market.
D)it will maximize consumer surplus.

Question

Quizplus · Accepted Answer

A price floor creates a surplus of supply, leading to a deadweight loss, as employers are required to pay a wage that is above the market equilibrium. The other choices are incorrect because minimum wage is actually set above the equilibrium wage, leading to a decrease in the number of jobs available in the labor market and a decrease in consumer surplus.

Because Minimum Wage Is a Price Floor