Figure 19-2
-Refer to Figure 19-2. This figure depicts labor demand and supply in a nonunionized labor market. The original equilibrium is at $10. If a labor union subsequently establishes a union shop and negotiates an hourly wage of $12.50, then employment is

Question

Figure 19-2 
-Refer to Figure 19-2. This figure depicts labor demand and supply in a nonunionized labor market. The original equilibrium is at $10. If a labor union subsequently establishes a union shop and negotiates an hourly wage of $12.50, then employment is

Quizplus · Accepted Answer

When the wage is increased to $12.50, it is above the original equilibrium wage of $10. This typically results in a surplus of labor, meaning fewer workers are employed than at the equilibrium wage. In this scenario, employment would decrease to 500, which is the quantity of labor demanded at the higher wage.

Figure 19-2 -Refer to Figure 19-2. This Figure Depicts Labor Demand and Labor