Answer to Question #35135 in Microeconomics for niekaiera

Question

if the demand for the estatate workers were inelastic,would the proposed increase in the minimum wage raise or lower total payments to the workers?would your answer change if the demand for the estate workers were elastic?

Answer 1

For the inelastic demand the proposed increase in the minimum wage will raise total payments to the workers, as the
demand will not be sugnificantly affected by this change.
But for the elastic demand the proposed increase in the minimum wage will
decrease total payments to the workers, as the demand will be
sugnificantly affected by this change.