Workers at a bicycle assembly plant currently make minimum wage.If the provincial government increases the minimum wage by $1.00 an hour,what will likely happen

Question

Quizplus · Accepted Answer

Increasing the minimum wage will increase labor costs for the bicycle assembly plant. As a result, the firm will face higher costs of production, leading to a decrease in the supply of bicycles. This is because the firm may need to reduce output or raise prices to maintain profit levels, which will reduce the quantity of bicycles supplied. Therefore, the supply of bicycles will shift to the left.

Workers at a Bicycle Assembly Plant Currently Make Minimum Wage