A minimum wage above the equilibrium wage leads to an excess quantity supplied of labor.

Question

Quizplus · Accepted Answer

If the minimum wage is set above the equilibrium wage level, employers will demand less labor as the cost of hiring workers has increased. At the same time, more people will be willing to work at the higher wage, leading to excess quantity supplied of labor. This can lead to unemployment, underemployment, or reduced working hours for affected workers.

A Minimum Wage Above the Equilibrium Wage Leads to an Excess