Final answer:
In the absence of a minimum wage, a decline in the demand for labor would likely result in a decrease in labor demand, assuming wages are flexible.
Step-by-step explanation:
In a labor market without minimum wage, if there is a decline in the demand for labor, the result, assuming wages are flexible, is likely a decrease in the labor demand. This situation corresponds to option B) Decrease in labor demand. If we consider efficiency wages, firms might pay above the market-clearing wage to boost productivity and reduce turnover. However, if the demand for labor falls, even efficiency wages may not prevent a decrease in labor demand as firms adjust to lower levels of production and employment needs. Labor unions could attempt to maintain wages, but they cannot force firms to hire if the demand for labor has genuinely fallen. Therefore, in the described scenario, with flexible wages and declining labor demand, we do not expect an increase in labor supply or no change in the labor market.