The diagram below shows the supply and demand for labour in a hypothetical town in northern British Columbia,with only one employer,a logging company.
FIGURE 14- 4
-Refer to Figure 14- 4.Suppose the workers in this town form a union to negotiate the wage rate with the firm.Economists refer to this situation as

Question

The diagram below shows the supply and demand for labour in a hypothetical town in northern British Columbia,with only one employer,a logging company.
  FIGURE 14- 4
-Refer to Figure 14- 4.Suppose the workers in this town form a union to negotiate the wage rate with the firm.Economists refer to this situation as

Quizplus · Accepted Answer

In this situation, there is only one employer and a group of workers forming a union to negotiate wages. This is an example of a bilateral monopoly, which occurs when both the seller (the employer) and the buyer (the workers) have market power and are able to negotiate the terms of the transaction. The fact that there is only one employer also means that this is not a competitive labour market. It is not a unionized monopoly because the union does not have complete control over supply and demand in the labour market.

The Diagram Below Shows the Supply and Demand for Labour