The demand curve in Sector 1 of the labor market is L1 = a - bw. The
Question:
a. Solve for the equilibrium with no minimum wage.
b. Solve for the equilibrium at which the minimum wage is w in Sector 1 ("the covered sector") only.
c. Solve for the equilibrium at which the minimum wage w applies to the entire labor market?
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Related Book For
Microeconomics Theory and Applications with Calculus
ISBN: 978-0133019933
3rd edition
Authors: Jeffrey M. Perloff
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