Answer to Question #111889 in Microeconomics for tshepo

Question

If wages are lower than equilibrium, then the demand for labor is much higher than supply, since for low wages few workers will agree to perform the specified amount of work.

Answer 1

The Effect of a Minimum Wage Increase on Employment and Unemployment. At the same time, the higher minimum wage means that more people would like jobs. The increase in the amount of labor that people would like to supply, and the decrease in the amount of labor that firms demand, both serve to increase unemployment