Figure 18-7 -Refer to Figure 18-7. If the relevant labor supply curve is S₂ and the current wage is W₁, A)there is a surplus of labor. B)the quantity of labor demanded exceeds the quantity of labor supplied. C)an increase in the minimum wage could restore equilibrium in the market. D)firms will need to raise the wage to restore equilibrium.

Question

Quizplus · Accepted Answer

According to the labor supply curve S₂ and the current wage W₁, there is a surplus of labor because the quantity of labor supplied exceeds the quantity of labor demanded. Therefore, firms do not need to raise the wage, and an increase in the minimum wage may not be effective in restoring equilibrium in the market.

Figure 18-7 -Refer to Figure 18-7. If the Relevant Labor Supply Curve