When a minimum wage is introduced ________ the equilibrium wage rate,the quantity of labor demanded ________ and the quantity of labor supplied ________,thus creating unemployment.
A) above; increases; decreases
B) below; increases; decreases
C) above; decreases; increases
D) above; decreases; decreases
E) below; decreases; decreases

Question

Quizplus · Accepted Answer

When a minimum wage is set above the equilibrium wage rate, employers demand less labor because the cost of labor is higher, while more individuals are willing to work at the higher wage, leading to an excess supply of labor, or unemployment.

When a Minimum Wage Is Introduced ________ the Equilibrium Wage