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 the union practice of featherbedding?

Question

Quizplus · Accepted Answer

Featherbedding is the practice of requiring employers to hire more workers than necessary which results in higher labor costs and reduced efficiency. This leads to an increase in the wage rate (W1 to W2), but a decrease in the amount of employment (Q1 to Q2). Hence, the market equilibrium shifts from point a to point b, where the wage rate is higher but the quantity of employment is lower.

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