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 - 20w). The labour supply curve is QS = 400 + 40w). 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 of labour supplied is QS = 400 + 40w = 400 + 40(11) = 840, while the quantity of labour demanded is QD = 1000 - 20w = 1000 - 20(11) = 780. Therefore, there is now a surplus of labour of 840 - 780 = 60 workers who are willing and able to work at the going wage rate but cannot find employment. This means that there will be a decrease in employment of 20 workers (the difference between the initial equilibrium employment of 820 workers and the new equilibrium employment of 800 workers).

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