Economics 9708 · AS & A Level · Long-run costs and economies of scale

Long-run costs and economies of scale — practice question

The diagram illustrates an industry’s demand for labour and supply of labour. At first, the labour market is at equilibrium. The government sets a minimum wage of OW0. What effect will this have on employment in the industry?

  • Aa decrease equal to XY
  • Ba decrease equal to XZ
  • Can increase equal to XY
  • Dan increase equal to YZ

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