The imposition of a minimum wage on a competitive labor market will likely
A. lower the unemployment rate of low-income families.
B. increase unemployment of high-skilled workers as firms substitute for high-skilled labor with low-skilled labor.
C. create unemployment as some people enter the labor market while some firms reduce the quantity of labor they are willing to employ due to the increased wage.
D. lower the wages of workers earning more than the minimum wage.
E. create additional employment opportunities because some low-skilled workers will now see their wage increase.
Answer: C
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