A minimum wage that is set below a market's equilibrium wage will result in A. an excess demand...

Question:

A minimum wage that is set below a market's equilibrium wage will result in

A. an excess demand for labor, that is unemployment.

B. an excess demand for labor, that is, a shortage of workers.

C. an excess supply of labor, that is unemployment.

D. None of the above is correct.

Market Equilibrium:

Market equilibrium is where the supply level is equal to the demand level. A minimum wage rate can be imposed by the government; this is the minimum amount that an employer is allowed to pay a worker.

Answer and Explanation: 1

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A minimum wage that is set below a market's equilibrium wage will result in D. None of the above is correct.

A minimum wage set below equilibrium has...

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Labor Market: Definition & Theory

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Chapter 3 / Lesson 41
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Learn the labor market definition and what happens in the labor market. See what the split labor market theory is and learn the different types of labor market.


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