For a given increase in the minimum wage, which of the following would likely result in a smaller decrease in teenage employment? a. Teenage workers are close substitutes with older workers who are paid more than the minimum wage. b. Teenagers are paid so

The answer is (d) Teenagers produce goods that have a high price elasticity of demand. This means that the demand for the goods produced by teenagers is more responsive to changes in price. Therefore, if the price of the goods increases due to an increase in the minimum wage, the demand for the goods will likely decrease less compared to goods with low price elasticity of demand. As a result, employers may be less likely to reduce their teenage workforce. Option (a) is incorrect because if teenage workers are close substitutes with older workers who are paid more than the minimum wage, employers may choose to hire more experienced workers instead of teenagers after the minimum wage increase. Option (b) is incorrect because if teenagers are paid so little that the minimum wage increases their wage more, employers may choose to reduce their teenage workforce to control labor costs. Option (c) is incorrect because if teenager labor represents a small fraction of the cost of making goods, employers may choose to reduce their teenage workforce to control labor costs.