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Minimum wage affects supply and demand by influencing the labor market. When a minimum wage is set above the equilibrium wage, it can lead to a surplus of labor, as more individuals are willing to work at the higher wage, but employers may reduce hiring or lay off workers due to increased labor costs. Conversely, a higher minimum wage can increase the purchasing power of workers, potentially boosting demand for goods and services. However, if employers raise prices to cover increased labor costs, it may offset some of the demand benefits.
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When minimum wage increases for workers how does this affect the supply curve for a company?
When minimum wage increases for workers this affects the supply curve upwards for the company. This will mean that the cost goes up which pushes the curve to the left.
How is the price of labor determined?
By supply and demand, in a totally unfettered economy. Many nations have a legislated minimum wage.
How might a minimum-wage law and that the supply and demand of workers?
A minimum-wage law sets a legal floor on wages that employers must pay, which can lead to increased income for low-wage workers. However, if the minimum wage is set above the equilibrium wage determined by supply and demand, it may result in a surplus of labor, meaning more workers may seek jobs than there are positions available. This can lead to higher unemployment rates among low-skilled workers, as employers may hire fewer workers or reduce hours to offset increased labor costs. Ultimately, the impact of minimum wage laws on labor supply and demand depends on their specific levels and the economic context.
How does wage increases affect the demand for and supply of labor?
wages will go down because productivity is lower
Which example best demonstrates the effect of artificial price controls on supply and demand?
Rent controls result in shortages and minimum wage laws result in surpluses
How could setting a new minimum wage give us an excess supply of workers in the us?
If the minimum wage is raised, more people who are not currently working will be willing to work for that wage, increasing the supply of workers. Also tend to hire less employees at higher wages, causing a lessening of demand. The combination of less demand are more supply could cause an excess supply of workers at minimum wage jobs, which tend to be unskilled.
When minimum wage increases for workers how does this affect the supply curve for a company?
When minimum wage increases for workers this affects the supply curve upwards for the company. This will mean that the cost goes up which pushes the curve to the left.
How is the price of labor determined?
By supply and demand, in a totally unfettered economy. Many nations have a legislated minimum wage.
How might a minimum-wage law and that the supply and demand of workers?
A minimum-wage law sets a legal floor on wages that employers must pay, which can lead to increased income for low-wage workers. However, if the minimum wage is set above the equilibrium wage determined by supply and demand, it may result in a surplus of labor, meaning more workers may seek jobs than there are positions available. This can lead to higher unemployment rates among low-skilled workers, as employers may hire fewer workers or reduce hours to offset increased labor costs. Ultimately, the impact of minimum wage laws on labor supply and demand depends on their specific levels and the economic context.
How does wage increases affect the demand for and supply of labor?
wages will go down because productivity is lower
How can the government affect the wage of workers?
By increasing or decreasing the minimum wage.
Which example best demonstrates the effect of artificial price controls on supply and demand?
Rent controls result in shortages and minimum wage laws result in surpluses
What happens when demand for workers is high and supply is low to the equilibrium wage?
Wage goes down.
What happens to the equilibrium wage when the demand for workers is high and supply is low?
Wage goes down.
What generally happens to the equilibrium wage when demand for workers is low and supply is high?
Wage goes down.
What generally happens to the equilibrium wage demand for workers is high and supply is low?
Wage goes down.
What generally happens to the equilibrium wage when demand for workers is high and supply is low?
Wage goes down.
