A union will be more successful at forming when the firm's labor demand curve is inelastic because under these conditions the union organizers can "promise"
A) low union dues.
B) small wage losses but large employment gains.
C) small wage gains and minimal employment losses.
D) large wage gains and large employment gains.
E) large wage gains with minimal employment losses.

Question

Quizplus · Accepted Answer

When a firm's labor demand curve is inelastic, it means that the firm's demand for labor does not significantly decrease with an increase in wages. Therefore, union organizers can promise large wage gains with minimal employment losses because the firm will continue to employ nearly the same number of workers even at higher wages.

A Union Will Be More Successful at Forming When the Firm's