Refer to the Diagram Below, Which Shows a Competitive Low-Wage

question 45

Multiple Choice

refer to the diagram below, which shows a competitive low-wage labor market:


-Consider the diagram.Suppose the government establishes a minimum wage of $7.00 in this market.Which of the following is a true statement?

• A)Demand is elastic over the relevant range,so that total wage income rises
• B)Demand is elastic over the relevant range,so that total wage income falls
• C)Demand is inelastic over the relevant range,so that total wage income rises
• D)Demand is inelastic over the relevant range,so that total wage income falls

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