When a union bargains successfully with employers, what happens to quantity of labour supplied and demanded in that industry?
A) Both the quantity of labour supplied and the quantity of labour demanded increase.
B) Both the quantity of labour supplied and the quantity of labour demanded decrease.
C) The quantity of labour supplied increases and the quantity of labour demanded decreases.
D) The quantity of labour supplied decreases the quantity of labour demanded increases.

Question

Quizplus · Accepted Answer

When a union successfully bargains with employers, they often negotiate higher wages and better working conditions for their members. This will lead to an increase in the quantity of labour supplied by workers who now have an increased incentive to work in the industry. However, the higher wages will also increase the cost of labour for employers, leading to a decrease in the quantity of labour demanded as employers may now hire fewer workers in order to control costs. Therefore, the quantity of labour supplied increases and the quantity of labour demanded decreases.

When a Union Bargains Successfully with Employers, What Happens to Quantity