If, through collective bargaining, a union is able to raise the wage above the existing competitive equilibrium wage,
A)fewer workers will be employed than before the wage increase.
B)more workers will be employed than before the wage increase.
C)the same number of workers will be employed as before the wage increase.
D)the number of workers that will be employed is not related to the wage increase.

Question

Quizplus · Accepted Answer

When a union raises wages above the competitive equilibrium through collective bargaining, the cost of labor for employers increases. As a result, employers tend to hire fewer workers than they would at the equilibrium wage, leading to a reduction in employment.

If, Through Collective Bargaining, a Union Is Able to Raise