39 FIGURE 14- 6
-Refer to Figure 14- 6. If a labour union negotiates the wage to W2 in an otherwise competitive labour market,

Name: 39 FIGURE 14- 6 -Refer to Figure 14- 6. If a labour union negotiates the wage to W2 in an otherwise competitive labour market,
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Question

39  FIGURE 14- 6
-Refer to Figure 14- 6. If a labour union negotiates the wage to W2 in an otherwise competitive labour market,

Quizplus · Accepted Answer

If the wage is set at W2, which is above the equilibrium wage, employers will hire fewer workers, specifically L1, because the higher wage makes it more costly to employ the same number of workers as before.