Suppose there is a competitive market for retail workers at a large shopping mall that is large enough to constitute its own labour market.The labour demand curve is QD = 1000 - 20(w).The labour supply curve is QS = 400 + 40(w).Suppose that a union now successfully organizes the workers at this mall and obtains a wage rate of $11 (but does not affect the demand curve).One result is

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At a wage rate of $11, the quantity demanded of labour is QD = 1000 - 20(11) = 780, and the quantity supplied of labour is QS = 400 + 40(11) = 840. Since the quantity supplied exceeds the quantity demanded (840 > 780), there is a surplus of workers. The excess supply of labour results in a decrease in employment of 20 workers.

Suppose There Is a Competitive Market for Retail Workers at a Large