How Price Floors Affect Market Outcomes W L D S $4 Price floor $5 The eqm wage ($4) is below the floor and therefore illegal.
{"Image DocumentName": "How Price Floors Affect Market Outcomes", "Image ImageDescription": "labor surplus. W. L. S. Price floor.  5. The eq\u2019m wage ( 4) is below the floor and therefore illegal. The floor is a binding constraint on the wage, causes a surplus (i.e., unemployment). D  4. Now, the minimum wage exceeds the equilibrium wage. The equilibrium wage (or any wage below  5) is illegal. In this case, the actual wage will be  5. It will not be lower, because any lower wage is illegal. It will not be higher, because at any higher wage, the surplus would be even greater. The actual number of unskilled workers with jobs equals want jobs, but firms are only willing to hire 400, leaving a surplus (i.e. unemployment) of 150 workers. A surplus of anything \u2013 especially labor \u2013 represents wasted resources. 10.", "Image XResolution": "37", "Image YResolution": "37", "Image ResolutionUnit": "Pixels/Centimeter", "Image Software": "SlidePlayer", "Image YCbCrPositioning": "Centered"}