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 this labour market is in a monopsonistic equilibrium. Then, suppose the workers form a union to negotiate the wage with the firm. In this case the wage will be
And the employment will be .
A) $30 per hour; 1000 units of labour
B) $35 per hour; 750 units of labour
C) above $35 per hour; less than 750 units of labour
D) above $25 per hour; above or below 750 units of labour, depending on the negotiated wage
E) between $25 and $35 per hour; between 750 and 1000 units of labour
Correct Answer:
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