If the legal minimum wage is set above the equilibrium wage rate

A) employment will tend to be lower than it otherwise would have been.
B) employment will tend to be higher than it otherwise would have been.
C) the level of employment will not be affected.
D) there is no way to determine how the level of employment would be affected.

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Daniel Osagie · Accepted Answer

Final Answer : A, Explanation :  When the legal minimum wage is set above the equilibrium wage rate, employers will be forced to pay a higher wage to workers. This will increase the cost of labor for employers, making it more expensive to hire workers. As a result, employers may choose to reduce their workforce, leading to a decrease in employment. Therefore, employment will tend to be lower than it otherwise would have been.

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