Figure 12-3

-Refer to Figure 12-3.This figure depicts labor demand and supply in a nonunionized labor market.The original equilibrium is at point A.If a labor union subsequently establishes a union shop and negotiates an hourly wage of $20,then there will be an excess
A)supply of 3,000 workers.
B)demand of 7,000 workers.
C)supply of 4,000 workers.
D)supply of 7,000 workers.

Question

Figure 12-3
 
-Refer to Figure 12-3.This figure depicts labor demand and supply in a nonunionized labor market.The original equilibrium is at point A.If a labor union subsequently establishes a union shop and negotiates an hourly wage of $20,then there will be an excess
A)supply of 3,000 workers. 
B)demand of 7,000 workers. 
C)supply of 4,000 workers. 
D)supply of 7,000 workers.

Quizplus · Accepted Answer

If the union negotiates a wage of $20, which is above the equilibrium wage, the quantity of labor supplied will exceed the quantity of labor demanded, resulting in an excess supply of 7,000 workers.

Figure 12-3 -Refer to Figure 12-3.This Figure Depicts Labor Demand and Supply