A minimum wage has been placed on a monopsony labor market that is greater than the monopsony wage, but less than the wage where the marginal revenue product of labor and the marginal factor cost of labor intersect.
What happens as a result of the minimum wage?
Choose 1 answer:
(A) Wages decrease.
(B) Employment increases
(C) Deadweight loss increases.
(D) Employment decreases.
(E) Total earnings to workers decrease.
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