Answer to Question #87442 in Economics for Fikile mashilwane

Question

in the labour market for carpenters, the current clearing wage rate is R800 per day. with the aid of a diagram, discuss effects of government in the form of legislation that sets the minimum wage rate for a carpenter at R1000 per day

Answer 1

If the minimum wage rate for a carpenter at R1000 per day is set, then there will be a surplus of labor, so the market will become inefficient and the deadweight loss will be created.