Minimum Wage in a Competitive Labor Market
Binding minimum wage above equilibrium creates unemployment: Ls > Ld
Effects in a Competitive Market
Why a Higher Minimum Wage Reduces Employment
Minimum Wage in a Monopsony
Why?
In monopsony: minimum wage between Wm and Wc can increase BOTH wages and employment
Monopsony + Minimum Wage Effects
Side-by-Side Comparison
Key Insight
AP Exam Tips
- •
- •
- •
- •
- •
Common Mistakes
- •
- •
- •
- •