In the case of a vertical contract curve, union negotiations will result in the firm hiring
A) more workers and at a higher wage than it would in the absence of the union.
B) the same number of workers but at a higher wage than it would in the absence of the union.
C) fewer workers but at a lower wage than it would in the absence of the union.
D) fewer workers but at a higher wage than it would in the absence of the union.
E) the same number of workers but at a lower wage than it would in the absence of the union.

Question

Quizplus · Accepted Answer

In the context of labor economics, a vertical contract curve in union negotiations suggests that the bargaining outcome will lead to the firm hiring the same number of workers as it would without union influence, but at a higher wage. This is because the union's bargaining power primarily affects the wage level rather than the employment level in this scenario.

In the Case of a Vertical Contract Curve, Union Negotiations