Answer to Question #24585 in Microeconomics for saad

Question #24585
Let's assume that many of the workers in the silk shirt industry make the minimum wage. (Note: A minimum wage law sets a minimum acceptable wage for labor.) If the minimum wage is increased via this law, in the market for silk shirts we would expect: A. P* up, Q* down B. P* up, Q* up C. P* down, Q* down D. P* down, Q* up E. A movement to the right along the supply curve.
1
Expert's answer
2013-02-22T06:11:32-0500
C. P* down, Q* down, If minimum wage increases it will lead to increase of cost and increase of prices. Increase of prices will shift demand curve down

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