-The above figure shows a labor market with minimum wage equal to $16.In this figure,what area equals the firms' surplus?
A) area A
B) area B
C) area C
D) area D
E) area E

Question

-The above figure shows a labor market with minimum wage equal to $16.In this figure,what area equals the firms' surplus?
A) area A 
B) area B 
C) area C 
D) area D 
E) area E

Quizplus · Accepted Answer

Firms' surplus is the area above the supply curve and below the price line. In this case, the price line is the minimum wage of $16, and the supply curve is the upward-sloping line. The area above the supply curve and below the price line is area A.

-The Above Figure Shows a Labor Market with Minimum Wage