Use the Figure Below to Answer the Following Questions

question 62

Multiple Choice

Use the figure below to answer the following questions.

Figure 18.3.2
-Refer to Figure 18.3.2. Suppose this industry is initially in a monopsony situation and then the government introduces a minimum wage of $8 per hour. Choose the correct statement.

• A)The wage rate rises, but employment decreases.
• B)The wage rate rises, but employment stays the same.
• C)The wage rate rises to $8 per hour, and employment increases to 800 hours.
• D)The wage rate rises to $8 per hour, and employment increases to 600 hours.
• E)The wage rate rises to $8 per hour, and employment increases to 500 hours.

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