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). The number of workers employed after unionization is .

Question

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At a wage rate of $11, the quantity of labor demanded (QD) is 1000 - 20(11) = 780. The number of workers employed is determined by the demand at the union wage rate.

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