Respuesta :
The cost of manufacturing the commodity increases with a rise in wage rates, causing producers to boost their selling prices. Less output will be produced and sold as a result of consumers buying less of the product when its price increases. As a result, less labor will be required.
How does minimum wage influence the demand and supply in the labor market?
A higher salary or compensation—that is, a higher price in the labor market—leads to a fall in the quantity of labor that employers require, whereas a lower salary or wage causes an increase in the quantity of labor demanded. This is how the law of demand operates in labor markets.
How do wages affect labor supply?
When earnings rise, more people choose to work and the opportunity cost of leisure rises. It's interesting to note that this isn't always the case! When the marginal advantage of greater wages falls below the marginal benefit of leisure, individuals move to more leisure and less work. The marginal benefit of higher earnings decreases as wages rise.
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