If workers in a labor market form a union, wages should _____, and the quantity of labor employed should _____.
A)decrease; decrease.
B)increase; increase.
C)increase; decrease
D)increase; increase..

Question

Quizplus · Accepted Answer

When workers form a union, they have more bargaining power to negotiate better wages and working conditions, leading to an increase in wages. However, as the wage rate increases, firms may substitute labor with other factors of production, such as technology or capital, leading to a decrease in the quantity of labor employed. This is why choice C is the most accurate answer.

If Workers in a Labor Market Form a Union, Wages