refer to the following diagram
-Suppose this labor market is competitive,so that the wage rate is W₂ and employment is Q₃.If W* is imposed as the minimum wage,then employment in this market:

Question

refer to the following diagram -Suppose this labor market is competitive,so that the wage rate is W₂ and employment is Q₃.If W* is imposed as the minimum wage,then employment in this market:

Quizplus · Accepted Answer

The minimum wage (W*) is above the equilibrium wage rate (W₂). As a result, firms will be less willing to hire as they will have to pay a higher wage for the same level of output. This will lead to a decrease in employment from Q₃ to a lower level. Therefore, the correct choice is B - employment will fall.

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