Question

(b) What will be the resultant effects on the labour market if the minimum wage is set below the
market equilibrium wage rate?

OR
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Answer 1

Answer:

If the equilibrium wage is below the minimum wage, however, then there will be a surplus of labor: at the artificially high minimum wage, aggregate demand for labor is lower than aggregate supply, meaning that there will be unemployment (surpluses of labor).

Explanation:

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Answer 2

Answer:

If the equilibrium wage is below the minimum wage, however, then there will be a surplus of labor: at the artificially high minimum wage, aggregate demand for labor is lower than aggregate supply, meaning that there will be unemployment (surpluses of labor).

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