If the minimum wage were currently above the equilibrium wage,then a decrease in the minimum wage that kept it above the equilibrium wage would
A)increase the surplus of labor.
B)reduce the surplus of labor.
C)increase the shortage of labor.
D)reduce the shortage of labor,

Question

Quizplus · Accepted Answer

If the minimum wage is above the equilibrium wage, then there is a surplus of labor, which means that there are more workers willing to work at that wage rate than there are jobs available. In such a situation, reducing the minimum wage while keeping it above the equilibrium wage would decrease the surplus of labor as more employers would demand labor at the lower wage rate, and some of the workers who were previously unemployed would now find jobs. However, if the minimum wage were reduced below the equilibrium wage, it would increase the surplus of labor as more workers would be willing to work at the lower wage rate, but fewer employers would demand labor at that wage rate.

If the Minimum Wage Were Currently Above the Equilibrium Wage,then