Labor Economics 5th Edition by George Borjas

Exercise 5

Consider the same set-up as in problem 10-5, but now the union is allowed to specify any wage, w , and the firm is then allowed to hire as many workers as it wants (up to 225) at the daily wage of w. What wage will the union set in order to maximize the total income of all 225 workers How many workers will the firm hire How much output will be produced How much profit will the firm earn What is the total income of the 225 union workers