-The above figure shows a labor market with a minimum wage of $8 an hour.The deadweight loss equals the
A) area abc.
B) distance ab.
C) distance ad.
D) area bad.
E) area acd.

Question

-The above figure shows a labor market with a minimum wage of $8 an hour.The deadweight loss equals the
A) area abc. 
B) distance ab. 
C) distance ad. 
D) area bad. 
E) area acd.

Quizplus · Accepted Answer

The deadweight loss in a labor market with a minimum wage is represented by the area of the triangle formed by the supply and demand curves and the minimum wage line. This area represents the loss in economic efficiency due to the minimum wage causing unemployment and unmet labor demand. In this case, the correct answer is the area labeled abc, as it captures the inefficiency created between the quantity of labor supplied and demanded at the minimum wage.

-The Above Figure Shows a Labor Market with a Minimum