Unions and efficiency wages usually lead to wages that are below the equilibrium level.

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Quizplus · Accepted Answer

Unions and efficiency wages may lead to wages that are above the equilibrium level, as they may cause a shift in the labor market demand curve, resulting in higher wages. This is especially true for skilled laborers who are members of powerful unions. Efficiency wages may also lead to higher wages by incentivizing workers to work harder and stay longer with a company.

Unions and Efficiency Wages Usually Lead to Wages That Are