If a professional association restricts membership and firms cannot employ nonassociation workers, the equilibrium wage will increase.

Question

Quizplus · Accepted Answer

Restricting membership to a professional association can limit the supply of workers in that profession, leading to an increase in the equilibrium wage as firms compete for a smaller pool of qualified workers. The requirement that firms only employ association workers also limits the potential supply, further driving up wages.

If a Professional Association Restricts Membership and Firms Cannot Employ