Suppose that studies show that a ten percent increase in the minimum wage decreases the number of minimum wage jobs by one percent. That would be the case if

Question

Quizplus · Accepted Answer

The demand for labor is inelastic if a ten percent increase in the minimum wage leads to only a one percent decrease in the number of minimum wage jobs. This indicates that employers' need for workers does not significantly decrease even when the cost of labor goes up, which is characteristic of inelastic demand.

Suppose That Studies Show That a Ten Percent Increase in the Minimum