For the minimum wage to be relevant it must be
A)above the equilibrium wage.
B)below the equilibrium wage.
C)at the equilibrium wage.
D)slightly below the equilibrium wage.

Question

Quizplus · Accepted Answer

For the minimum wage to be relevant and have an impact on the labor market, it must be set above the equilibrium wage. If it's set below or at the equilibrium wage, it wouldn't affect the wages employers pay or the employment levels, as the market forces would already be paying at or above this level.

For the Minimum Wage to Be Relevant It Must Be