If the minimum wage is set above the equilibrium wage by the government,there is an excess supply of labor in the market.

Question

Quizplus · Accepted Answer

A minimum wage set above the equilibrium wage would create a situation where employers would demand less labor while more workers would be willing to work at that higher wage rate, resulting in a surplus or excess supply of labor. This means that some workers who want to work at the higher wage may be unable to find jobs, leading to potential unemployment or underemployment.

If the Minimum Wage Is Set Above the Equilibrium Wage