Answer to Question #331241 in Macroeconomics for Nalyn

Question

What are the effects of minimum wage on labor market (both labor demand and labor supply)?

Answer 1

If the minimum wage rate increases, employers will want to hire fewer employees. The quantity of labor demanded will decrease, and there will be a movement upward along the demand curve. If the wages and salaries decrease, employers are more likely to hire a greater number of workers.