If a perfectly competitive firm is currently employing workers to the point where the value of the last worker's marginal product is equal to the wage rate, and the government imposes a minimum wage higher than the value of the worker's marginal product, we can predict that

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When the government imposes a minimum wage, it sets a legal floor on the wage rate that firms must pay their workers. If the minimum wage is higher than the value of the marginal product of the last worker, the firm will no longer be willing to hire that worker because the cost of hiring the worker is now greater than the benefit the worker generates. As a result, the firm will decrease its quantity of labor demanded, and the number of workers employed will fall.

If a Perfectly Competitive Firm Is Currently Employing Workers to the Point