Question

Would a higher minimum wage rate cause a shift of a firm's labor demand curve or a movement along that curve? Explain.

Short answer

A small raise would increase employee productivity while decreasing employee turnover. A shift in the equilibrium quantity of the employment product; a transition in the production line. Companies will also want to employ fewer people if indeed the wage rates go up.

Step-by-step solution

Introduction.

Raising the minimum wage would also enhance customer expenditure, benefit company bottom lines, and aid economic growth. A small raise would boost worker productivity while decreasing employee turnover rate. It will also promote economic growth as a whole by boosting customer market pressure.

A manufacturing or service equilibrium price.

A change in quantity demanded of the product that labour produces; a change in the manufacturing process that uses more or fewer workers; and a shift in state policies that affect the number of employees firms want to hire at a specific rate.

Explanation. 

Employers will also want to hire fewer people if the wage rate rises. The quantity of labour demanded will decrease, and the demand curve will shift upward.