Exhibit 12-9 In Exhibit 12-9, the labor supply and labor demand in a unionized labor market is represented by the demand curve D₀ and Supply curve S₀.Which of the market equilibria is the most likely outcome of a union improving labor management relations which results in an increase in the productivity of labor?

Question

Quizplus · Accepted Answer

The most likely outcome of a union improving labor management relations and increasing labor productivity is an increase in the quantity of labor demanded and an increase in wages. This will shift the labor demand curve to the right, resulting in a new equilibrium point with a higher quantity of labor supplied and a higher wage rate. This is represented by point b in Exhibit 12-9.

Exhibit 12-9 in Exhibit 12-9, the Labor Supply and Labor