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Lauren1 Lauren1
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8 years ago
What happens to the quantity of labor supplied, the quantity of labor demanded, and the number of unemployed workers if the minimum wage rate set above the equilibrium wage is increased still higher?
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MrDerecheMrDereche
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8 years ago
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An increase in the minimum wage increases the quantity of labor supplied because more people are willing to work at the higher wage rate. It decreases the quantity of labor demanded because firms hire fewer workers since the cost of the workers (their wage rate) has increased. The increase in the quantity supplied combined with the decrease in quantity demanded leads to an increase in the number of unemployed workers.
 
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Lauren1 Author
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#2
8 years ago
Thank you, this really, really helps Heavy Heart
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#3
8 years ago
You're welcome!
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