Question

A country has passed a law setting a minimum wage for factory workers 5% below the equilibrium price. How will this law impact the labor market?
A.) The law will likely cause a shortage of labor.
B.) The law will likely increase unemployment.
C.) The law will have no impact on the market.
D) The law will increase prices without affecting quantity.

Answer 1

Answer:

C.) The law will have no impact on the market.

Explanation:

The minimum wage refers that the producers could charge high amount as compared with the wages i.e. minimum also the equilibrium wage would be more than the minimum wage so this represents that the market is an equilibrium point and hence there is no impact on the market

Therefore the option C is correct

And, hence all the other options are wrong