Asked by Tequila Barnes on Jun 13, 2024
Verified
If a labor market is dominated by a monopolist, it is possible that the imposition of a minimum wage law could increase the amount of employment in that market.
Monopolist
An individual or entity that has exclusive control over the supply of a particular good or service, allowing for the manipulation of prices.
Minimum Wage Law
Legislation that sets the lowest hourly wage rate that an employer can legally pay its workers.
Employment
The condition of having paid work or the total number of people currently employed in the economy.
- Study the mechanisms of employment distribution and wage structuring in labor markets subjected to monopolistic and monopsonistic powers.
Verified Answer
AM
Antoinette McCloudJun 19, 2024
Final Answer :
True
Explanation :
If the monopolist is keeping wages artificially low in order to maximize profits, a minimum wage law could force them to hire more workers at higher wages, resulting in an increase in employment. However, this is only true if the increase in wages does not cause the monopolist to reduce employment in order to maintain their profit margins.
Learning Objectives
- Study the mechanisms of employment distribution and wage structuring in labor markets subjected to monopolistic and monopsonistic powers.