When a minimum-wage law forces the wage to remain above the equilibrium level,it
A)raises both the quantity of labor supplied and the quantity of labor demanded compared to the equilibrium level.
B)raises the quantity of labor supplied and reduces the quantity of labor demanded compared to the equilibrium level.
C)reduces the quantity of labor supplied and raises the quantity of labor demanded compared to the equilibrium level.
D)reduces both the quantity of labor supplied and the quantity of labor demanded compared to the equilibrium level.

Question

Quizplus · Accepted Answer

When the minimum wage is set above the equilibrium wage, it creates a surplus of labor, which means that the quantity of labor supplied increases while the quantity of labor demanded decreases. This is because employers are less willing to hire as many workers at the higher wage, while more individuals are willing to work at the higher wage. Therefore, option B is the correct answer.

When a Minimum-Wage Law Forces the Wage to Remain Above