Which of the following is an effect of a minimum wage law th

Which of the following is an effect of a minimum wage law that establishes a minimum wage below the current market clearing? wage?

A.

A decrease in the market clearing wage

B.

Surplus? labor, or unemployment

C.

There will be no? effect, since the price floor is not binding

D.

A decrease in the quantity of labor supplied

Anyone with a quick and sweet answer

Solution

Ans is C

Minimum legal price is price floor. Price floor is the minimum price which a a seller can set and cannot set price lower than this but can set price above it.

Thus prce floor below equilibrium price is always not binding.