The potential gains to a union in terms of wages and employment will be greatest if the firm's demand for labor is

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If a firm's demand for labor is inelastic, it means that it is not very responsive to changes in wages or employment levels. In such a situation, a union can negotiate for higher wages and better job security without significantly affecting the firm's demand for labor. On the other hand, if a firm's demand for labor is elastic, it means that it is very responsive to changes in wages or employment levels. In such a situation, a union's demands for higher wages or increased employment may lead to decreased demand for labor from the firm, which could result in job losses or decreased wages. Therefore, the potential gains to a union in terms of wages and employment will be greatest if the firm's demand for labor is inelastic.

The Potential Gains to a Union in Terms of Wages