If the equilibrium wage in the market for unskilled labor is $8.00 per hour,and the government sets a minimum wage at $7.50 per hour,unskilled workers will receive a pay cut of about 50 cents per hour.

Question

Quizplus · Accepted Answer

Since the equilibrium wage is still legal, the market will remain at the original equilibrium. Competition in the labor market will prevent wages from falling.

If the Equilibrium Wage in the Market for Unskilled Labor