Use demand and supply curves

2006-11-27 4:16 am
Use demand and supply curves to explain the impacts of imposing minimum wage law in Hong Kong.(Graph and explanation.)

回答 (2)

2006-11-29 3:27 am
✔ 最佳答案
Normal demand curve and supply curve will make an equilibrium price and an equilibrium quantity.

Suppose the minimum wage (W) (the price floor) set below the market equilibrium price (P) (ie wages), (W < P) the minimum wage will have no effect and the wages will automatically increase to the equilibrium price (W = P). It is because the market mechanism will automatically adjust.

所以一個有意義的price floor, 一定會比equilibrium price為高 :
So the minimum wage must be set above the market equilibrium price (W > P). Under this situation, the excess supply of labour will occur. That is the quantity supplied (QS) greater than the quantity demanded (QD). It cannot be solved because government impose this minimum wage law. At last, only QD number of people will have employment, and the excess of supply of labour will be unemployed.
2006-11-27 5:27 am
given are effective minimum wage
the price floor sets above the market clear price,it cause the price of wage increases,
when price increases,the quantity demand decreases,the unemployment rate will increase because the new quantity demand is less than before.Other thing being unchanged


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