Several states have set the minimum wage in their states
higher than the federal minimum wage. If doing so places them at a competitive
disadvantage for new business this might be counterproductive. On the other
hand, the minimum wage is typically relevant only in low-paid service jobs.
· Who
makes the minimum wage in your community?
· Would
your community be better off with a higher minimum wage?
· One
of the principal opponents to minimum-wage increases is the umbrella
organization for small business. Many states with higher minimum wages than the
federal level exempt businesses with few employees. Should small businesses be
exempt from minimum-wage laws?
· Imagine
an owner of a firm is thinking about raising prices. Describe the consequences
of doing so as a monopolist, oligopolist, monopolistic competitor, and perfect
competitor.
· Think about This: One
of the concerns about Walmart’s entry into the grocery business in the latter
part of the 1990s was that it would set low prices, drive little stores out of
business, and then raise prices to monopoly levels when it had no competition.
Can you explain why it has not happened ?
