Is the minimum wage a ‘price ceiling’ or a ‘price floor’? Suppose government decides to set a
minimum wage rule.
(a) With the help of a diagram show the effect of the minimum wage rule on the labour market given
the wage is set above the market equilibrium wage rate. 5
(b) What will be the resultant effects on the labour market if the minimum wage is set below the
market equilibrium wage rate?
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B is the answer but am not sure
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