FIGURE 14-2
-Refer to Figure 14-2.Suppose the labour market is in a monopsonistic equilibrium.If a minimum wage is then imposed at W_5,the effect would be to

Question

FIGURE 14-2 -Refer to Figure 14-2.Suppose the labour market is in a monopsonistic equilibrium.If a minimum wage is then imposed at W_5,the effect would be to

Quizplus · Accepted Answer

If a minimum wage is imposed at W5, the effect would be to increase wages and maintain employment but create a pool of unemployed workers. This is because the minimum wage would make it more expensive for firms to hire workers, so they would hire fewer workers. The workers who are not hired would be unemployed.

FIGURE 14-2 -Refer to Figure 14-2.Suppose the Labour Market Is in a in a Monopsonistic