Economics (AS & A Level) · May / June 2025 · Paper 32 · Question 12
9708Labour market forces and government intervention
The diagram shows the labour market for a profit maximising industry with a monopsony employer. [diagram: wage rate vs quantity of labour, showing marginal cost, average cost, marginal revenue product curves, with W1 marked] What will decrease if a minimum wage of W1 is introduced?
- Aeconomic rent
- Btransfer earnings
- Cunemployment
- Dwages
As printed in the paper
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Correct answer: C. unemployment
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