If the minimum wage were currently above the equilibrium wage,than a decrease in the minimum wage would
A)increase both the quantity demanded and the quantity supplied of labor.
B)decrease both the quantity demanded and the quantity supplied of labor.
C)increase the quantity of labor demanded and decrease the quantity supplied.
D)decrease the quantity of labor demanded and increase the quantity supplied.

Question

Quizplus · Accepted Answer

When the minimum wage is above the equilibrium wage, it creates a surplus of labor (unemployment). Lowering the minimum wage towards the equilibrium wage increases the quantity of labor demanded by employers and decreases the quantity of labor supplied by workers.

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