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When a Minimum-Wage Law Forces the Wage to Remain Above

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When a minimum-wage law forces the wage to remain above the level that balances supply and demand, the quantity of labor supplied is higher and the quantity demanded of labor is lower than at the equilibrium wage.


Definitions:

Market Value

The existing exchange rate for assets or services in the marketplace.

Underpricing

The practice of listing a company's stock at a lower price than its market value during its IPO, typically to ensure the stock is fully subscribed.

Indirect Flotation Cost

Expenses indirectly incurred by a company when raising new capital, such as underpricing or the costs associated with time and effort.

Filing Fees

Charges required to file documents with a governmental body or court, often mandatory for legal processes, registrations, or applications.

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