Question

In a particular labor market, the demand for labor is given by W = 20 – (1 / 100)L, and the supply of labor is given by W = 4 + (1 / 100)L, where W is the wage rate, and L is the number of workers. Suppose that the government decides to impose a minimum wage of $15. The wage will:

Answer 1

The wage will create surplus of workers since it is above the equilibrium wage.