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-(Figure: The Effect of a Minimum Wage) Use Figure: The Effect of a Minimum Wage. Suppose the labor market is in equilibrium at E when the government imposes a minimum wage of W_F. The quantity of labor supplied may_____, resulting in structural unemployment.

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-(Figure: The Effect of a Minimum Wage) Use Figure: The Effect of a Minimum Wage. Suppose the labor market is in equilibrium at E when the government imposes a minimum wage of W_F. The quantity of labor supplied may_____, resulting in structural unemployment.

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When a minimum wage is set above the equilibrium wage, the quantity of labor supplied increases because more workers are willing to work at the higher wage, leading to a surplus of labor (structural unemployment) since the quantity of labor demanded does not match the increased supply.

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