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-(Figure: The Minimum Wage) Use Figure: The Minimum Wage. What is the quantity of labor demanded at a binding minimum wage of P₃?

Question

Use the following to answer questions:

-(Figure: The Minimum Wage) Use Figure: The Minimum Wage. What is the quantity of labor demanded at a binding minimum wage of P₃?

Quizplus · Accepted Answer

At a binding minimum wage of P3, the quantity of labor demanded is Q1. This is because the minimum wage is above the equilibrium wage, so firms are willing to hire fewer workers than they would at the equilibrium wage.

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