contestada

If the equilibrium wage is $9 in the market for hotel workers and $8 in the market for restaurant workers and both markets have similar elasticities of labor supply and demand, then a minimum wage of $4 in both markets will:

Respuesta :

In such circumstances, the supply of labor in both markets will fall. The equilibrium salary for both industries is already at least twice as much the $4 rate. With such a low salary, there's no incentive to supply labor, especially if the situation is not critical that will compel people to accept almost any salary level in order to survive.