In a competitive labor market,a minimum wage law set above the equilibrium wage rate
A) creates a shortage of labor.
B) causes equality between the quantity of labor supplied and the quantity demanded.
C) creates a surplus of labor.
D) lowers the wage rate paid to workers.
E) has no impact.

Question

Quizplus · Accepted Answer

A minimum wage law set above the equilibrium wage rate creates a surplus of labor, as more workers are willing to work at the higher wage rate, but fewer employers are willing to pay that rate, leading to an excess supply of labor. This can result in higher unemployment and a reduction in overall economic efficiency.

In a Competitive Labor Market,a Minimum Wage Law Set Above