dolution

A Mexican firm employs unskilled, semiskilled, and skilled labor in a cost-minimizing mix at its manufacturing plant. The marginal product of unskilled labor is considerably lower than semiskilled and skilled labor, but the equilibrium wage for unskilled labor is only 300 pesos per day. The government passes a law that mandates a minimum wage of 400 pesos per day. Equilibrium wages for semiskilled and skilled labor exceed this minimum wage and therefore are not affected by the new law. The firm will most likely respond to the imposition of the minimum wage law by:

A. employing more unskilled workers at its plant. B. employing fewer unskilled workers at its plant. C. keeping the mix of unskilled, semiskilled, and skilled workers the same.