What happens if minimum wage is set above equilibrium wage?

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What happens if minimum wage is set above equilibrium wage?

Minimum Wage:

The minimum wage refers to the lowest remuneration set by the government to be paid to the workers by the employers. Besides, most countries have set the minimum wage to defend the employees from being exploited by employers in the economy. A higher minimum wage increases the per capita income leading to high GDP due to increased demand for products.

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When the government sets the minimum wage above the equilibrium wage, it creates unemployment in the market. Besides, the higher minimum wage will...

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Minimum Wage and its Effects on Employment

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Chapter 6 / Lesson 6
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Understand the effect of minimum wage on employment. Study wage employment graphs and how they work, and discover pros and cons of minimum wage increase effects.


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