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HELP!!! AP MACROECONOMICS!!! 50PTS!

If the minimum wage that all businesses pay their employees increases, what happens to the supply of consumer goods as a result?

increases
remains the same
decreases

User Stanton
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1 Answer

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Answer:

B) decreases

Step-by-step explanation:

If the minimum wage increases, the supply of consumer goods will generally decrease. This is because the increase in the minimum wage increases the cost of labor for businesses, which in turn increases the cost of producing goods. To maintain their profit margins, businesses may have to reduce the quantity of goods they supply to the market. As a result, the overall supply of consumer goods will decrease. This relationship between the minimum wage and supply of goods is a basic economic principle known as the law of supply, which states that an increase in price will lead to a decrease in quantity supplied, and vice versa.

User AzraelAT
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