The federal minimum wage was last increased from 655 to 725


The federal minimum wage was last increased from $6.55 to $7.25 per hour. Suppose that the elasticity of labor supply of teenagers is 0.12. Using this estimate, by what percent would you expect teenagers’ quantity of labor supplied to change in response to the change in the minimum wage? (For simplicity, assume that all teenage workers receive the minimum wage.) Show your work.

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Business Economics: The federal minimum wage was last increased from 655 to 725
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