Answered

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The government of Egalitariania wants to favor firms and is considering implementing a maximum wage. Assume the maximum wage is both binding and less than the equilibrium wage. What happens to the employment of workers

Sagot :

Parrain

Answer: It will increase

Explanation:

A maximum wage means that companies do not have to pay more than a certain wage limit. If this wage limit is less than the equilibrium wage, companies would be able to spend less on wages than they are normally supposed to.

Their cost will therefore reduce and they will be able to hire more workers with the money they would have spent to pay the workers the equilibrium wage thereby increasing the number of people employed in the country.

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