Which of the following causes a surplus in the labor market?
A)A minimum wage rate
B)Price discrimination
C)Outsourcing
D)The law of diminishing marginal productivity
E)The backward-bending shape of the labor supply curve

Question

Quizplus · Accepted Answer

A minimum wage rate set above the equilibrium wage can cause a surplus in the labor market because it increases the price of labor, leading employers to hire fewer workers while more workers are willing to work at the higher wage.

Which of the Following Causes a Surplus in the Labor