Multiple Choice
Exhibit 12-6 
-Assume an industrial union is formed and establishes the wage rate at $4 in Exhibit 12-6. The reason the wage rate will not fall to the competitive equilibrium level is that
A) all workers are wealthier in disequilibrium
B) nonunion workers are poorer than union workers
C) there is excess demand for labor at equilibrium
D) there is excess supply of labor at equilibrium
E) wages are determined by collective negotiation, not individual negotiation
Correct Answer:
Verified
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