Figure 18-7 -Refer to Figure 18-7. If the Relevant Labor Supply Curve

Multiple Choice

Figure 18-7
-Refer to Figure 18-7. If the relevant labor supply curve is S₂ and the current wage is W₁,

A) there is a surplus of labor.
B) the quantity of labor demanded exceeds the quantity of labor supplied.
C) an increase in the minimum wage could restore equilibrium in the market.
D) firms will need to raise the wage to restore equilibrium.