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In a competitive market

In a competitive market - also depends on the labor demand...

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In a competitive market, if minimum wage is above market wage (price floor), unemployment should increase according to theory. That is because labor supplied exceeds labor demanded under the new minimum wage. The effect on unemployment
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Unformatted text preview: also depends on the labor demand elasticity. However, empirical data suggests that minimum wage often decreased unemployment as opposed to what theory suggests....
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