FIGURE 14-2 -Refer to Figure 14-2.Suppose the Labour Market Is in a in a Monopsonistic

question 35

Multiple Choice

FIGURE 14-2
-Refer to Figure 14-2.Suppose the labour market is in a monopsonistic equilibrium.If a minimum wage is then imposed at W_5,the effect would be to

• A)increase employment only.
• B)waste policy effort,as there would be no effect whatsoever in the labour market.
• C)increase wages and maintain employment but create a pool of unemployed workers.
• D)increase wages and create a shortage of workers.
• E)decrease wages but employment would remain the same.