According to some supporters of the minimum wage, it has very small or even nonexistent negative employment effects because:

A. the demand for minimum wage labor is highly elastic.
B. it reduces turnover among minimum wage workers, prompts employers to use them more
efficiently, and thus raises their average productivity.
C. it encourages teenagers to stay in school.
D. employers substitute lower fringe benefits for higher pay, keeping their compensation costs
the same.


Answer: B

Economics

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