Labor Economics 5th Edition by George Borjas

Exercise 2

Use a graph to demonstrate the likely bargaining outcomes of three industries, all with identical union resistance curves.
(a) Firm A has been losing money recently as wages and fringe benefits have risen from 63 to 89 percent of all costs in just the last three years.
(b) Most of firm B's revenues come from supplying a product to three customers who use the product in their manufacturing of computers using a just-in-time inventory system.
(c) Firm C is a local government that finds itself negotiating with its unionized employees. Government officials are pleased with the employees' productivity, but they also face local pressure to keep taxes low.