Assume a competitive industry in long-run equilibrium. The industry exhibits increasing costs. All the workers in the industry earn the minimum wage. Suppose the minimum wage is increased by 15%.
a) What is the short-run response of the industry and the firms within it?
b) In the long-run, what happens to equilibrium price, individual firm output, industry output, and the number of firms in the industry?
c) What happens to the total number of workers employed in the industry?