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 $13 but does not affect the position of the demand curve). One result is

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At a wage rate of $13, the quantity of labour demanded is QD = 1000 - 20(13) = 740, while the quantity of labour supplied is QS = 400 + 40(13) = 920. Therefore, there is now a surplus of labour of 920 - 740 = 180 workers.
Since the union has successfully negotiated a wage rate of $13, which is higher than the previous equilibrium wage of $10, the number of workers willing to work at this new, higher wage rate has increased. However, the higher wage rate has also reduced the number of retail workers that employers are willing to hire. This can be seen in the new quantity demanded of QD = 740, which is less than the previous equilibrium quantity of 820.
The net effect is a decrease in employment of 820 - 740 = 80 workers. However, since the initial equilibrium had 400 workers employed, the decrease in employment represents a proportionally significant decrease of 80/400 = 20%. Therefore, the correct answer is E, with a decrease in employment of 60 workers.

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