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    impact of the minimum wage on unemployment using demand, supply and competitive equilibrium analysis

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    1. "If price rises then demand decreases. But if demand decreases, then equilibrium price will fall. Therefore, one cannot say with certainty what the net effect of an intitial decrease in price will be."
    Is this statement correct? Are all the terms used correctly in this statement? Let me know your thoughts. How would you describe the impact of the minimum wage on unemployment using demand, supply and competitive equilibium analysis? What do you think?

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    https://brainmass.com/economics/demand-supply/18920

    Solution Preview

    If price rises, then the QUANTITY demanded decreases. So the economy will move downward along the demand curve. But demand curve itself doesn't change.
    <br>In the statement "But if demand decreases, then equilibrium price will fall." Here means the demand curve itself shifts left (decreases), then economy will move downward along the SUPPLY curve, and equilibrium price will fall. But the shift of demand curve is not due to change in price, but due to exogenous factors, like consumer's tastes, availability of ...

    Solution Summary

    How would you describe the impact of the minimum wage on unemployment using demand, supply and competitive equilibrium analysis? What do you think?

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