Critics of the minimum wage contend that imposing a wage higher than the equilibrium wage in a competitive industry would:
A) decrease the number of workers employed in that industry.
B) decrease the quantity of labor supplied to that industry.
C) increase the demand for labor in the industry.
D) increase employment in that industry.

Question

Quizplus · Accepted Answer

When the minimum wage is higher than the equilibrium wage in a competitive industry, it makes it more expensive for businesses to hire workers, leading to a decrease in the number of workers employed in that industry. This is because businesses cannot afford to hire as many workers as before due to the increased cost, which leads to a decrease in the demand for labor in that industry. Additionally, the quantity of labor supplied to that industry may also decrease as workers become less willing to work for lower wages in other industries. Hence, the correct answer is A.

Critics of the Minimum Wage Contend That Imposing a Wage